Top 10 Banks, 2 FIs Earn Bangladesh Bank’s 2024 Sustainability Nod
Bangladesh Bank (BB) has recognised 10 private commercial banks and two financial institutions (FIs) as sustainable financial institutions in the BB's Sustainability Rating 2024. The 10 banks are BRAC Bank, City Bank, Dutch-Bangla Bank, Eastern Bank, Jamuna Bank, Mutual Trust Bank, NCC Bank, Prime Bank, Pubali Bank, and Shahjalal Islami Bank. In the non-banking financial sector, IDLC Finance and IPDC Finance have retained their positions in the sustainability ranking report for the second consecutive year. The central bank evaluates institutions based on five key indicators, Sustainable Finance Index, CSR activities, financing of green projects, Core Banking Sustainability Index, and banking services coverage. The Core Banking Sustainability and Banking Services Coverage indicators collectively account for about 60% of the total score. Banks with strong risk management, adequate capital and low non-performing loan (NPL) ratios tend to score higher.
Key metrics include net NPL ratio, Tier-1 capital to risk-weighted assets, provision maintenance, share of CMSME loans and exposure in large loan portfolios. For Banking Services Coverage, which weighs around 10%, factors like branch network, the number of deposit and loan accounts and agent banking outlets are taken into consideration. Bangladesh Bank introduced the sustainability rating system in 2020 to encourage financial institutions to incorporate Environmental, Social and Governance (ESG) practices into their operations.
