Banks urged to fulfill green obligation

Wang Zhaoxing, vice chairman of the China Banking Regulatory Commission, answers reporters' questions on the siadeline of the International Green Credit Forum, co-hosted by the CBRC and IFC, on May 16, 2012. [Photo/chinadaily.com.cn]

China may publish the names of banks and companies which did not perform well in regards to green credit and environmental protection, Wang Zhaoxing, vice chairman of the China Banking Regulatory Commission (CBRC), told reporters on the sideline of a forum in Beijing.

Green credit, loans for environmentally sustainable development, encourages lending to environmental friendly projects and firms, and restricts money from flowing to industries which guzzle energy and heavily pollute.

Wang said China will establish evaluation and supervision mechanisms to assess banks' work on green credit, and the standards will also apply to the banks' overseas branches and operations.

He added that comprehensive information and results of the evaluation would be promptly released. Additionally, a bank's evaluation result will influence the assessment of its senior executives' performances.

Wang made the remarks while attending the International Green Credit Forum, co-hosted by the CBRC and IFC of the World Bank. The forum, which runs May 16 and 17, aims to provide a platform for emerging markets involved in sustainable banking and "green growth."

Officials and bankers from China, Bangladesh, Brazil, India and other developing countries exchanged their views on green finance.

China launched its Green Credit Policy in 2007, and in February this year, CBRC launched the Green Credit Guidelines, acknowledging the key role that the financial sector plays in promoting sustainable development.

Wang said although China already has its policy and regulation on green finance in place, more work needs to be done in establishing specific standards so banks can make their loans according to the guildines.

Clear rewards and penalties would also be effective, Wang added.