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Underpinning the benefits of green banking: A comparative study between Islamic and conventional banks in Bangladesh
Author(s) -
Sharmeen Kashfia,
Hasan Rashedul,
Miah Mohammad Dulal
Publication year - 2018
Publication title -
thunderbird international business review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.553
H-Index - 37
eISSN - 1520-6874
pISSN - 1096-4762
DOI - 10.1002/tie.22031
Subject(s) - islam , profitability index , accounting , business , underpinning , audit , reputation , islamic banking , independence (probability theory) , index (typography) , compliance (psychology) , corporate governance , financial system , environmental compliance , finance , environmental protection , engineering , civil engineering , psychology , social psychology , social science , philosophy , statistics , theology , mathematics , environmental science , sociology , world wide web , computer science
This study aims to compare environmental motives and performance of conventional and Islamic banks in Bangladesh. Green compliance index was developed based on the Bangladesh Bank (the central bank of Bangladesh) guidelines whereas information regarding governance variables is collected from the annual reports of 9 Islamic and 31 conventional banks. Results show Islamic banks are more environmentally friendly compared to their conventional counterparts. Board size is negatively related to green compliance whereas board independence and auditor's type do not have any significant influence on green compliance for both clusters of banks. Compliance with green banking policies enhances the reputation for Islamic banks and accountability and profitability for conventional banks. Results of this study provide useful information for regulatory authorities to formulate policies that are conducive to enhance bank's environmental performance.