Indian Banking Sector
Banks play a pivotal role in sustainable development of a country, and green banking today has become a phraseology. Due to financial, economic and environmental changes, financial services market is re-shaping and an all-inclusive engagement of ethical proposal and values into banking practices is taking place (Lymperopoulos et al., 2012; San-Jose et al., 2009). Banking sector facilitates adaptation of environment friendly strategies, mitigates climate risks and supports recovery by diverting funds to climate-sensitive sectors (Part & Kim, 2020). Today, environmental and green banking has become synonym with sustainability (Kärnä et al., 2003), so banks are broadcasting corporate social responsibility (CSR) activities (Scholtens, 2011). Banks globally are investing substantially in green strategies (Evangelinos et al., 2009) to create green image. Greening of bank is further reducing carbon footprints from banking activities, and this is mutually beneficial to the banks, industries and the economy (Bihari & Pandey, 2015).
Indian banking sector
Many relevant studies have been conducted on green banking before. Scholtens assigns green bank marketing as a component of larger CSR concept. Economic agents banks play an important role in financing environment-friendly projects (Nizam et al., 2019) and thus contribute towards society (Rehman et al., 2021). Kärnä et al. (2003) and Grove et al. (1996) explained association between green marketing and CSR, in non-banking sector. Lymperopoulos et al. (2012) tested the favorable impact of green bank marketing and green image; for Evangelinos et al. (2009) development of green services was the prime focus. Kumar and Prakash (2018) also opine that implementing sustainable banking practices can be a strong stimulus to sustainable development and points towards scarcity of studies related to sustainable banking in Indian banks. Nizam et al. (2019) emphasized the need for implementing Green banking initiatives in routine operations, whereas Masukujjaman et al. (2017) talked about pivotal role played by green banking in developing economies at social, corporate and environmental level.
Developed nations have attracted major research on green banking though developing nations have ignored them (Khan et al., 2015; Jeucken, 2015; Amacanin, 2005; Scholtens, 2011; Roca & Searcy, 2012; Weber, 2016), and in countries like India research on green banking is relatively undiscovered (Prakash et al., 2018). Majority of research in India is on corporate social responsibility and management of environment (Biswas, 2011; Narwal, 2007; Rajput et al., 2013; Sahoo & Nayak, 2007; Sharma & Mani, 2013), green banking strategies (Bihari, 2010; Bahl, 2012; Jha & Bhoome, 2013; Tara & Singh, 2014) and green practices adopted by public and private sector banks.
Communication gap between the various stakeholders, lack of awareness, lack of green image of the banks and lack of trust are amongst the various reasons why the outcome of the green outreach by the banks is not as expected. Lymperopoulos et al. (2012) empirically validated that green bank marketing positively influences green image of the bank. However, no such study has been conducted in Indian scenario. The impact of Green banking initiatives to enhance the Green trust and further Green brand image has not been studied so far in Indian scenario.
The remaining of this paper is organized as follows: the next section discusses literature review which throws light on green banking, Green banking initiatives in India and challenges of implementing Green banking initiatives in India. Thereafter, the outcomes of Green banking initiatives, viz. Green brand image and Green trust, are discussed as subsections. Afterwards, the research methodology is explained with the help of techniques used for data collection and data analysis. Thereby, findings are discussed which elucidate how research questions are answered. The study is concluded by highlighting the implications and limitations of the research.
Green banking is a form of banking activity where the banks take initiative to do its daily activates as a conscious entity in the society by considering in-house and external environmental sustainability. The banks who do such type of banking activities are termed as socially responsible and a sustainable bank or green bank or ethical bank (Hossain et al., 2020; Zhixia et al., 2018).
Lymperopoulos et al. (2012) verified empirically that banking initiatives that are green result in a favorable, green image. His green bank marketing construct is comprised of green corporate social responsibility (GCSR), green internal process (GIP) and green product development (GPD).
As a part of Green banking initiatives, several banks throughout the globe and NBFIs have adopted eco-friendly mechanisms for financing as well as green transformation of internal operations. For instance, banks in nations like Bangladesh, Brazil, Columbia and Indonesia have started practicing green banking relatively along the lines of the policy framework (Bahl, 2012; Rahman & Akhtar, 2016). Bank of Ceylon in its annual report of 2015 stated that all their services and goods are driven towards more technology-oriented platforms which helps in reduction of carbon footprints. Also, peoples bank has initiated a paradigm shift to its old model of banking (Oyegunle & Weber, 2015). Banks in China, Turkey, Mongolia, Vietnam, Indonesia, Kenya and Peru have also introduced green banking concepts like SmartGen with mobile and internet-oriented passbook free application, fortune branches being installed and initiation of smart zones (Scholtens, 2009; Bank of Ceylon, 2015; Herath & Herath, 2019).
Role of CSR in banks in creating Green brand image has not been explored much (Lymperopoulos et al., 2012). CSR is decision making in business, and it has ethical values, compliance with law and regards for environment, communities and people, communities attached to it. Banking relates to CSR with reference to cause-related marketing, ethical issues concerning minority and environment and quality of life (Donaldson & Dunfee, 2002). GCSR in banking has been emphasized by Scholtens (2009), as a socially responsible bank that safeguard savings that are financing environmental projects.
Several issues of green marketing like green corporate social responsibility, green product development and green internal processing are addressed by previous studies (Scholtens, 2009; Evangelinos et al., 2009; Lymperopoulos et al., 2012; Herath & Herath, 2019) and are long established by several experts, as measurements of Green banking initiatives. Additionally, the outcomes of several qualitative research underline the major contribution of GCSR as an accomplishment for green banks, thereby backing up several former studies (Grove et al., 1996; Kärnä et al., 2003). Green communications also form an important part of green initiatives as the success of implementation depends upon how well they are communicated to the masses. Lymperopoulos et al. (2012) also pointed out that environmental awareness can be included in green banking.
India lags other market economies that are in emerging stage in terms of distinctive sustainability policy for their banking practices. Ministry of Finance and RBI together are focusing on developing a policy framework specifically for Indian green banking sector (Roy, 2017; Kumar & Prakash, 2018). The present study has clubbed the Green banking initiatives of leading Indian private and public sector banks in Indian banking into three categories, viz. green product development, green corporate social responsibility and green internal process (Scholtens, 2009; Evangelinos et al., 2009; Lymperopoulos et al., 2012) as presented in Table 1. Table 1 explains the three categories of Green banking initiatives, viz. GPD, GCSR and GIP, and different products introduced by different banks under each category.
Inclusive growth of economy requires a robust and healthy banking practices (Kumar & Prakash, 2018) Most of the activities of a green bank in India are focused on ATMs, internet banking, paperless banking, etc. (Biswas, 2011). It is also researched that Indian banks are not so well equipped to implement Green banking initiatives (Rajput et al., 2013), and they still have a long way to go (Kumar & Prakash, 2018). Reserve Bank of India is a major contributor in facilitating environmental policies. A developing country like India requires more thrust on the social dimension of banking and couples it with economic growth (UNEP FI, 2017). Limited Indian banks have advocated the green banking principles as per international standard. There is a need to improve regulatory framework (UNEP FI, 2011).
This research develops a conceptual framework (Fig. 1) that illustrates the impact of Green banking initiatives on Green brand image and Green trust. Green banking initiatives consist of three items, viz. green product development, green corporate social responsibility and green internal process (Lymperopoulos et al., 2012). The outcomes of Green banking initiatives are Green brand image measured by four items in the scale by Chen (2010) and Green trust measured by five items in the scale given by (Chen & Chang, 2013) (Table 2).
Green banking initiatives positively influence Green brand image (Lymperopoulos et al., 2012), and Green banking initiatives enhance customer trust and their willingness to purchase a product or service (Gefen & Straub, 2004).
As mentioned before, there is dearth of extensive study on green banking in India. Henceforth, the need for exploratory research is realized and chosen for the present study. Qualitative research provides a deep-seated understanding of the experience or case under observation and study by illuminating uncovering loosely connected insights and taking forward the casual relationship. Use of qualitative research is more apt for formulization and theory dissemination in the background when not much is public about the elemental variance. According to Eisenhardt (1989), developing a case study method which is based on theory is the favored investigation technique which assist not only in testing but also provoke innovative policy in new arenas. 041b061a72