Dhaka: Bangladesh Bank (BB) has recognised 10 private commercial banks and two financial institutions as sustainable financial institutions in the BB's Sustainability Rating 2024. The private banks that have achieved this recognition include BRAC Bank, City Bank, Dutch-Bangla Bank, Eastern Bank, Jamuna Bank, Mutual Trust Bank, NCC Bank, Prime Bank, Pubali Bank, and Shahjalal Islami Bank.
According to Bangladesh Sangbad Sangstha, in the non-banking financial sector, IDLC Finance and IPDC Finance have maintained 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 together account for about 60% of the total score. Banks that demonstrate 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% of the evaluation, factors such as branch network, the number of deposit and loan accounts, and agent banking outlets are considered. Bangladesh Bank introduced the sustainability rating system in 2020 to encourage financial institutions to incorporate Environmental, Social, and Governance (ESG) practices into their operations.