There has been enough discussion about green banking across the globe, but the concept has yet to find mass approval.

Green banks could be of great help in reducing perceived financing risks, financing underserved markets, attracting international investment, meeting national renewable energy targets and ensuring commitments to international climatic change deals.

Banks are, however, resistant to change. Banking staff in Nepal are used to air conditioners and printers that affect the environment, but would find it difficult to work without them.

Green banking is not just about reducing carbon-emitting equipment, it deals with green mortgage and green loans, too. Those practicing green banking should ensure that their loans are provided to those industries that do not pollute the environment. This would, however, restrict business transactions, resulting in lower productivity and a corresponding decline in profits. The banking industry, which makes impressive profits, doesn't want that. There will be limited avenues for banks to invest and will lose big corporate clients.

The next barrier that a bank opting for green banking faces is the operational cost. To efficiently reduce the use of carbon-emitting equipment and to ensure that loans are disbursed to only environment-friendly firms, there will be a need of strong team members.

From updated technologies, modern engineering to skilled manpower, they will all contribute to increased operational cost.

While providing loans, loan managers might also need additional expertise and background in dealing with green business and customers. The bank staff are accountable for ensuring that their clients are not involved in any environment pollution activity. Regular monitoring and evaluation task can be hectic for the banks.

There are many challenges for banks to go green. However, they cannot shun their responsibilities towards the environment.

Green banking also means the use of credit cards and debit cards, mobile banking, internet banking, recycling and reducing paper usage.

Mobile banking is getting popular in Nepal. Third party apps like E-sewa, Connect IPS are also promoting green banking by reducing over-the-counter transactions. Use of QR codes across the nation for payment will be the next way.

Nepali banks can improve their efficiency and work towards green banking through these channels. As per the direction of the central bank, branches are now being established at every local level.

These are organic regions, where there might not be any need for fans, air conditioners or heaters.

A version of this article appears in the print on April 07, 2021, of The Himalayan Times.