Department of Sustainable Finance (SFD) of Bangladesh Bank Circular No. 05: “Policy on Green Bond Financing for Banks and Financial Institution” dated 18 September 2022.
September 30, 2022Aiming to sustainable development goal, The Bangladesh Bank has issued a circular on green bond facility for banks and financial institution. As per the circular banks or NBFIs which hold more than 10% defaulted loans are not allowed to issue such bonds. According to circular, after being approved by the board of directors’ bank or a NBFI might issue green bond to raise its capital with a view to financing the proceeds in environmentally eligible projects. The banks and the NBFIs cannot finance more than 5 per cent of the sum of paid-up capital, statutory reserve, retained earnings and share premium account as time to time prescribed by the Bangladesh Bank. The green bond tenor should not exceed 15 years maturity and should be redeemable in nature.
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