Role of banking sector in promoting green investments: Exploring new developments

The corporate landscape is gradually moving towards a new premise in the wake of emerging climate change issues encountered by the business community. The natural disasters which experience globally due to climate change have the disruptive effect on corporate sustainability in long run as well as short run profitability of the corporate sector. It is generally believed that the banking sector has a primary responsibility for the go green and should take their hand together in green economic growth. Thus, this paper emphasizes on the role of banking sector in green growth in developing country of Sri Lanka based on secondary data like journals, paper articles, bank reports etc. Currently, Sri Lankan banking sector has taken their initial initiatives to improve the banking sector through green banking activities which are ultimately beneficial to the country's sustainable growth. Green Banking is a not an individual task of banks multi –stakeholders attempt is needed to enhance desired green growth.


Introduction
The process of collecting excess funds from financial surplus units and redistributing According to Thombre (2011) the green banking is operating like a normal bank, which considers all the social and ecological factors with an aim to protect the environment. Therefore, it serves both the profit-making objective of the bank as well as its social responsibility role on the entire economy as a socially responsible establishment. Further, Rajesh & Dileep (2014) defined that green banking refers to the efforts of the banking sector to keep the environment green and to minimize greenhouse effects through in-house operational activities and green finance motives. Accordingly, the transformation of the internal banking operation into a green oriented operation mechanism refers to greening the in-house operational activities like online banking, mobile banking, e-pass books, e-bank statements, ATMs, SMS banking etc. and accountability of financial resource allocation on green investments.
Green finance defines as financial support for the green growth of the economy which aims to reduce greenhouse gases and air pollutant emissions significantly. Moreover, in establishing the green banking system, both financial assets and fixed assets of the banking companies are used to enhance own sustainability, stakeholders' sustainability and the economic sustainability.
In many developing countries, accountability is lacking, irresponsibility is general phenomena, high level of corruptions in the political system and misuse of the public resources due to the drawbacks of governance mechanism. On the other hand, the high population growth in developing countries is generating an extraordinary rise in demand for energy, water, transport, urban development and agricultural infrastructure.
When they are fulfilling the growing demand, the global environmental and sustainability obligations will be challenging largely.
Obviously, these issues promote unfavorable setting and major constraint in turning the economy into the green growth economy. Thus, this study aims to achieve several objectives such as (a) to study various strategies for green banking approach (b) to explore the various initiatives taken peruse g r e e n b a n k i n g a n d e n v i r o n m e n t sustainability by banks (c) to study the major challenges for green banking and green finance initiatives.

Emerging demand for green banking
The business valuation is moving to a new platform due to the pressure of climate change and global temperature increase. Furthermore, Katyal & Nagpal (2014) contend that in addition to the above climate risks, normal banking institutions have to bear credit risk, legal risk and reputational risk due to traditional banking practices in the sustainable motive economy.
The primary activity of a bank is lending.
When banks lend funds to business firms whose businesses are harmful to the environment and those businesses can be On the other than, the banking industry can significantly contribute to maintain ecological balance of the world by adopting green practices in the operations.

Green banking for sustainability
The conventional banking system is a profit   Euros with a 10% yearly growth.

Green initiatives by Sri Lankan commercial banks
As an initiative to the green banking concept The bank aids green enterprises, through special incentives, grants, loans and guidance and follows a separate green lending scheme.

Lanka
Credit risk is one of the major challenges for adopting green banking concept in Sri Lanka.
Credit risk on finance will arise due to lending to those borrowers whose businesses are affected by the cost of pollution, change in environmental laws and regulations.
Moreover, the possibility of customers' default is high due to the result of unexpected overheads for the capital investment in production facilities, third party claims and also the loss of market share due to such cases. Still, banking companies are in doubt on green financing activities. Apart from credit risk, stakeholders' awareness and support also a major challenge in the green banking performance (Anh, 2017). In Sri Lankan context also it is a big challenge.

Conclusion
In twenty first century, the banking sector in developing countries has taken several steps to change Lankan banks are actually contributing to the sustainable growth or not. It is also learnt that global dialogs on green concepts has a significant orientation for the banks to go for green banking initiatives.