Shari’ah Based Banking and Green Banking for Sustainable Development: Evidence from Bangladesh

Abstract

Green banking emerged as an issue for sustainable development over the world. Green banking is an integral part of ‘Shari’ah’ based banking that makes a basis of environmental protection. The need to care for the environment and the forms of life that Allah has created on this earth that includes proper usage of natural resources (Al-Fajr: 11-14). Green banking involves in sustainable banking, ethical banking, green mortgages, green loans, green credit cards, mobile banking, online banking etc. that minimize filth and give importance to environment and society. This study attempts to examine the relationship between ‘Shariah’ based banking and green banking that contributes in sustainable development. The practices of green banking improves the environmental protection and save the human being from any destructive which is compliance to the shari’ah of Islamic banks. The study has used the primary data through a structural questionnaire that includes various dimensions on green banking of ‘Shari’ah’ based banking in Bangladesh. The study has also used secondary data relevant to articles, journals, books, and conference papers for theoretical development. In order to validate the findings, the necessary statistical measures include 5 point Likert scale, mean, and rank are used in the study. The study revealed that ‘Shari,ah’ based banking have made significant contribution in green banking that improves the environment as means of cost and energy savings, preservation of natural resources and the need to respect all living things. The study seems to carry an enormous academic value since a few studies have been undertaken in this area. The findings of the study could be useful to the regulatory body, World Bank, IMF, academic researchers and national policy makers who have been making endeavor to save the environment in developing countries as well as Bangladesh as a whole