Abstract
Green banking means promoting environmental-friendly practices and reducing your carbon footprint from your banking activities. The concept of green banking helps to create cleaner and greener future as Green Banking has direct impact on the environment. Indian Banks are now becoming more conscious on CSR and one of the main CSR is green banking. Banks are the real catalysts, as they are having big hand in development of economy, so Indian banks can play big role in implementation of green banking in India. This paper has been made to study level of consumers' awareness regarding "Green banking services" by selected Publicand Privatesector banks in Rajasthan, India. The study was conducted in 4 Cities of Rajasthan-Jaipur, Jodhpur, Udaipur and Ajmer. And, 4 Banks are selected, which are State Bank of India (SBI), Bank of Baroda (BOB), Industrial Credit and Investment Corporation of India (ICICI), and KOTAK Bank Pvt. Ltd - 2 public sector banks (SBI, BOB) and 2 private sector banks (ICICI, KOTAK).A sample of 160 customers was taken from selected 4 banks from 4 different cities of Rajasthan state.Further, 10 customers were taken from each bank in each city.The study also focuses on the basic concept of Green Banking, Various Green Banking services and initiatives taken by selected public and private sector banks in India.
Keywords: Green banking financial products, carbon footprint reduction, Green Loans, Green Checking A/Cs, Online Banking.
1. Introduction
The Green initiatives taken by Banks or a concept of Green banking means promoting environmental-friendly practices and reducing carbon footprint from banking activities. The concept of Green banking is mutually beneficial to the Consumers, banks, industries and the economy.The reasons for going green are manifold, and the key among them are:
• Increasing energy consumption and energy prices,
• Growing consumer interest in environmentally-friendly goods and services,
* Ex-Director, UGC Centre for Women Studies, Professor & HOD, Department of Banking & Business Economics, Mohan Lal Sukhadia University, Udaipur, Rajasthan
** Research Scholar, Mohan Lal Sukhadia University, Udaipur, Rajasthan. E-mail : [email protected]
Green Banking: A Study of Customers' Perspective in Rajasthan
• Higher expectations by the public on Ban's environmental responsibilities, and
• Emerging stricter regulatory and compliance requirements.
Objectives of the Study
• To study the concept of Green Banking.
• To study various initiatives taken by selected public and private sector banks in Rajasthan under Green Banking approach.
• To assess awareness level of customers regarding Green Banking services offered by selected public and private sector banks in the state of Rajasthan.
• To compare the awareness level of customers regarding Green Banking services offered by selected public and private sector banks in the state of Rajasthan.
Green Banking Services
A. Green Banking Financial Products
i. Green Deposits
ii. Green Mortgages and Loans
iii. Green Credit Cards
iv. Green Reward Checking Accounts
v. Mobile Banking
B. Carbon Footprint Reduction
Carbon foot-print is a measure of the impact of activities on the environment. It relates to the amount of Green House Gases (GHG) producing in day-to-day business while burning fossil fuels for electricity, heating, transportation etc. Banks can reduce their carbon footprints by adopting the following measures:
i. Paper-less Banking
ii. Energy Consciousness
iii. Using Mass Transportation System
iv. Go Online: Online Banking includes:
a. Paying bills online,
b. Remote deposit,
c. Online fund transfers, and
d. Online statements.
Green Banking Initiatives taken by selected Public and Private Sector Banks
I.
Public Sector Banks
State Bank of India (SBI)
• SBI had launched Green Channel Counter (GCC) facility at their branches in 2010 to change the traditional way of paper based banking (SBI, 2014).
• The bank had also collaborated with Suzlon Energy Ltd for the generation of wind power for selected branches by setting of windmills in Gujarat, Tamil Nadu and Maharashtra (Business Standard, 2014).
• It has become a signatory to the Carbon Disclosure Project in which they undertake various environmentally and socially sustainable initiatives through its branches spread across the length and breadth of the country (WWF-INDIA, 2014).
• Export Import Bank of India (EXIM) and SBI entered into an agreement to jointly provide long term loans up to 14 years to Spain based company Astonfield Renewable Resources and Grupo T-Solar Global SA for building solar plant in India (Yadav & Pathak, 2013).
Bank of Baroda
According to the annual report of BOB (2013), they had taken various green banking initiatives such as:
-• While financing a commercial project, BOB is giving preference to environmentally friendly green projects such as windmills, biomass and solar power projects which help in earning the carbon credits.
• The organization had made considerable changes in their lending policy, i.e. it is compulsory for industries to obtain 'No Objection Certificate' from the Pollution Control Board and also they are not extending any finance to environmental hazardous industries which are using ozone depletion substances such as halos-1211, 1301, 2402 used in foam products, chlorofluoro carbon CFC 11, 12, 113, solvents in cleaning and aerosol products.
• The bank had taken several technological initiatives such as compliance with e-business guidelines, use of internet banking, mobile banking to promote paperless banking and also increasing the installation of ATM's in most of uncovered areas to reduce the petrol or diesel consumption in travelling and helps in maintaining a clean environment.
• As a part of green initiative, they had made changes to desktop virtualization; backup consolidation and server virtualization improve data center operational efficiency.
II. Private Sector Banks
ICICI Bank Ltd
ICICI bank had adopted 'Go Green' initiative, which involves activities such as Green products/ offerings, Green engagement and green communication with customers as per ICICI Bank (2014):
• Green Products and Services: The bank is offering green products and services like
– Insta banking: It is a service which gives convenience to the customers to do banking anywhere and anytime through internet banking, mobile banking, IVR banking, etc. This reduces the carbon footprint of the customers as they do not require the physical statement or travel to the bank branches.
– 'Vehicle Finance': They are offering 50% waiver on processing fee of auto loans on the car models which uses alternate sources of energy like the Civic Hybrid of Honda, Tata Indica CNG, Reva electric cars, Mahindra Logan CNG versions, Maruti's LPG version of Maruti 800, Omni and Versa and Hyundai's Santro Eco.
– Home Finance : The bank had reduced the processing fee for the customers who are purchasing homes in LEED certified buildings.
•
Green Engagements
– During Diwali 2013, the organization had conducted an environmental awareness programme for employees and customers in which money plant was presented to all the people present there as a token of collective responsibility to protect the environment.
– It has also become partners with the Green theme CNBC - overdrive auto awards.
– The bank is celebrating World Environment Day every year on June 5. They perform various activities on that day like green pledge through signature campaigns, plantation and distribution of saplings etc. They are also celebrating Earth hour every year in March in which they switch off the lights of their premises, branches and ATM's between 8:30 pm to 9:30pm.
• Green Communications
The bank always insist their customers for online bill payment, online funds transfer and subscription to e-statements which promote 'paperless' and 'commute free' modes of banking transactions.
• Green Partners
Kotak Mahindra Bank
Through the 'Think Green' initiative, the bank had taken several initiatives as per Kotak Mahindra Bank
(2013):-• To reduce the paper consumption, the bank is encouraging their customers to sign for e-statements and also they have become partners with 'Grow-Trees.com' to plant one sapling for every e-statement on behalf of its customers. 16,623 saplings were planted FY 2012-13.
• The organization had established the 'Social, Environmental Management System Plan' (SEMSP) to evaluate the environmental and social risk of borrowers which is based on an IFC sustainable framework and performance standards.
• As per the guidelines of Ministry of Corporate Affairs (MCA), the bank had communicated to their shareholders to adopt electronic copies of annual report instead of physical copies.
• In 2009, they had consolidated their data centers into a single facility to improve power usage efficiencies.
• The rain water harvesting tank has been installed in the premises and also used oil generated from a diesel generator is disposed off through vendors approved by Pollution Control Board.
Need of the Study
Banks in India are playing a vital role towards sustainable development by introducing various green banking practices. Adoption of these green banking practices by the customers will result savings of energy, fuel, paper and other natural resources. Though, many studies have been made in the field of green banking globally but there have been very few studies done in India, especially in Rajasthan. The researcher realizes that no study has been carried out on environmental aspects of various green banking practices introduced by the banks in Rajasthan. Therefore, it is the high time to carry out study on green banking practices to make the people aware about their benefits to the users as well as the environment. Such study will surely help the banking sector, customers, policy makers and the society as a whole.
Area of Study
The area of study includes study of customer perception about Green Banking services in Rajasthan state. Further, the study was conducted in 4 Cities of Rajasthan- Jaipur, Jodhpur, Udaipur and Ajmer. And, 4 Banks are selected, which are State Bank of India (SBI), Bank of Baroda (BOB), Industrial Credit and Investment Corporation of India (ICICI), and KOTAK Bank Pvt. Ltd - 2 public sector banks (SBI, BOB) and 2 private sector banks (ICICI, KOTAK).
Materials and Methods/Research Methodology
2. Nature of Research : Since, data collected in this study wasanalyzed in quantitative terms. So, the research is Quantitative Research in nature.
3. Type of Data Required in Research : For carrying out research work, both primary as well as secondary data was used.
4. Methods of Data Collection : Primary Data: Primary data was collected through Structured Questionnaire from customers of selected public and private sector banks in Rajasthan state.
Secondary Data : Secondary data was collected from Magazines, Text books, Journals, E-Journals, News papers, internet and various websites.
5. Sample Size: In this study, a sample of 160 customers were taken from selected 4 banks (2 public and 2 private sector banks) from 4 different cities of Rajasthan state. Further, 10 customers were taken from each bank in each city.
The calculation of sample size is shown in the following table.
Table: No. of Customers to be taken for study (Sample Size)
Cities Public Sector Banks Private Sector Banks Total
SBI BOB ICICI KOTAK
Jaipur 10 10 10 10 40
Jodhpur 10 10 10 10 40
Udaipur 10 10 10 10 40
Ajmer 10 10 10 10 40
Total 40 40 40 40 160
6. Type of Sampling Design : Non- Random Convenience Sampling Design technique is used for the selection of sample out of the total population.
Data Analysis and Discussion
Out of the total sample size of 160 respondents, questionnaire of only 151 respondents were found to be fully complete and accurate. Their bifurcation as per banks is as follows:
Bank’s Name Total Respondents Accurate
SBI 40 38
BOB 40 37
ICICI 40 39
Kotak 40 37
1.
Awareness Level regarding Green Banking Services irrespective of Age Group:
Total Respondents: 151 Awareness level regarding Green Banking
Age Group Respondents Aware Not Aware
18-25 23 (15%) 20 (87%) 3 (13%) 26-40 69 (46%) 58 (84%) 11 (16%) 41-60 35 (23%) 25 (71%) 10 (29%) 61 and above 24 (16%) 13 (54%) 11 (46%)
Discussion: Out of total 151 respondents, major portion of the respondents, i.e. 46%, fall under the age group of 26-40. But, 87% respondents under the age group of 18-25 are aware about Green Banking Services, whereas respondents falling under the age group of 26-40 are having 84% awareness level. Respondents falling under the age group of 61 & above are not much aware about Green Banking Services, i.e. 54%.
2.
Customer's Awareness Level regarding Green Banking Services:
Bank’s Name
Total Respondents
Awareness level regarding Green Banking
Aware Not Aware
SBI 38 31 (82%) 7 (18%)
BOB 37 27 (73%) 10 (27%)
ICICI 39 32 (82%) 7 (18%)
Kotak 37 26 (70%) 11 (30%)
Discussion: If banks are individually compared, then Awareness level is maximum in 2 banks, i.e. SBI and ICICI, i.e. 82%. Whereas, BOB stands on second position (73%).
3.
Awareness Level of Various Green Banking Services:
Green Banking Services Awareness Level (Total Respondents: 151)
Aware Not Aware
Online Banking 135 (89%) 16 (11%)
Mobile Banking 82 (54%) 69 (46%)
Banking through ATMs 120 (79%) 31 (21%) Green Credit Cards 51 (34%) 100 (66%) Green Checking A/Cs 55 (36%) 96 (64%)
Green Loans 49 (32%) 102 (68%)
Solar Powered ATMs 23 (15%) 128 5%)
various Green Banking Services. After that Banking through ATMs come with an awareness level of 79%, followed by Mobile Banking with awareness level of 54%.
4. No. of customers using Green Banking Services:
Green Banking Services
No. of Customers
Aware Using Not Using
Online Banking 135 (89%) 88 (65%) 47 (35%) Mobile Banking 82 (54%) 43 (52%) 39 (48%) Banking through ATMs 120 (79%) 78 (65%) 42 (35%) Green Credit Cards 51 (34%) 24 (47%) 27 (53%) Green Checking A/Cs 55 (36%) 23 (42%) 32 (58%) Green Loans 49 (32%) 15 (31%) 34 (69%) Solar Powered ATMs 23 (15%) 1 (43%) 22 (96%)
Discussion: Out of the customers who are aware about Green Banking Services, 65% uses Online Banking, 52% uses Mobile Banking, 65% uses Banking through ATMs, 47% uses Green Credit Cards, and so on.
5. Bank wise bifurcation of customers using Green Banking Services:
Green Banking Services SBI (Total Respondents: 38) BOB (Total Respondents: 37)
Using Not Using Using Not Using
Online Banking 25 (66%) 13 (34%) 15 (41%) 22 (59%) Mobile Banking 12 (32%) 26 (38%) 6 (16%) 31 (84%) Banking through ATMs 23 (61%) 15 (39%) 14 (38%) 23 (62%) Green Credit Cards 5 (13%) 33 (87%) 3 (8%) 34 (92%) Green Checking A/Cs 6 (16%) 32 (84%) 4 (11%) 33 (89%) Green Loans 5 (13%) 33 (37%) 2 (5%) 35 (95%) Solar Powered ATMs 1 (3%) 37 (97%) NA -
Green Banking Serv ices ICICI (Total Respondents: 39) Kotak (Total Respondents: 37) Using Not Using Using Not Using
Online Banking 28 (72%) 11 (28%) 20 (54%) 17 (46%) Mobile Banking 15 (38%) 24 (62%) 10 (27%) 27 (73%) Banking through ATMs 23 (59%) 16 (41%) 18 (49%) 19 (51%) Green Credit Cards 10 (26%) 29 (74%) 6 (16%) 31 (84%) Green Checking A/Cs 8 (21%) 31 (79%) 5 (14%) 32 (86%) Green Loans 5 (13%) 34 87%) 3 (8%) 34 (92%)
Discussion: If individual banks are compared on the ground of various Green Banking Services, maximum percentage of customers using Online Banking are from ICICI (72%), followed by SBI (66%), Kotak (54%) and BOB (41%). In the same way, Mobile Banking services are being maximum used by ICICI, followed by SBI, Kotak and BOB. But in the case of Banking through ATMs, SBI stands on first position with % usage of 61%, followed by ICICI with % usage of 59%.
In rest of the services i.e. Green Credit Cards, Green Checking A/Cs, and Green Loans, ICICI stands ahead of SBI.
Findings
• Customers between the age group of 18-25 and 26-40 are highly aware about Green Banking Services.
• Awareness level of customers is maximum in 2 banks, i.e. SBI and ICICI, followed by BOB and Kotak.
• As far as popularity of various Green Banking Services are concerned, Online Banking is having maximum popularity. After that Banking through ATMs come, followed by Mobile Banking.
• Out of the customers who are aware about Green Banking Services, major portion uses Online Banking, followed by Mobile Banking, Banking through ATMs, Green Credit Cards, and so on.
• If individual banks are compared on the ground of various Green Banking Services, maximum percentage of customers using Online Banking is from ICICI, followed by SBI, Kotak and BOB.
• Overall, ICICI bank is having maximum customers using Green Banking Services, followed by SBI, though awareness level within customers regarding Green Banking Services is maximum in SBI followed by ICICI.
Conclusion
References
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