Bangladesh Bank asks banks, financial institutions to create climate risk funds

The central bank has instructed every bank and non-banking financial institution to create a ‘climate risk fund’.

Bangladesh Bank’s Green Banking and CSR Department gave the instruction on Thursday.

The banks and financial institutions will have to earmark at least 10 percent of their CSR budget for the climate risk fund.

The spending from the fund would be considered CSR expenses.

The main objective of the fund is to ensure participation of the institutions in efforts to tackle ecological degradation and pollution.

It also aims to help mitigate climate change-related risks, adapt to the climate changes, cut carbon emission and tackle disasters.

The fund can be used in any climate and disaster-related programme and project and for low-interest finance, the financial regulator said.

Donation can also be made from the fund.

Earlier, the central bank had issued ‘Guidelines for Green Banking’.