Green com­pa­nies may get eas­ier ac­cess to bank loans

The Pak Banker - - Company& -

JAKARTA: The cen­tral bank and the En­vi­ron­ment Min­istry agreed to pre­pare reg­u­la­tory frame­work on green bank­ing to give en­vi­ron­men­tally friendly firms eas­ier ac­cess to cred­its, top of­fi­cials say.

The agree­ment was signed in Jakarta by Bank In­done­sia Gover­nor Darmin Na­su­tion and En­vi­ron­ment Min­is­ter Gusti Mo­ham­mad Hatta.

The en­vi­ron­ment min­is­ter said the min­istry and cen­tral bank, un­der the MoU, agreed to pre­pare the reg­u­la­tory frame­work for green bank­ing through four main pro­grams.

"The pro­grams con­sist of the es­tab­lish­ment of le­gal tools, in­for­ma­tion, ed­u­ca­tion and joint re­search," he said at a press brief­ing at BI of­fices in Jakarta. The main pro­gram, Gusti said, would be the re­vi­sion of the cen­tral bank reg­u­la­tion (PBI) on green bank­ing and its guide­lines.

"There will be tech­ni­cal meet­ings be­tween BI and the Forestry Min­istry, along with sev­eral train­ing work­shops," he said, adding that the min­istry would need the help of banks so com­pa­nies that bor­rowed from them could help keep the en­vi­ron­ment healthy.

BI's Darmin said mod­ern bank­ing sys­tems needed more so­phis­ti­cated mech­a­nisms in the pro­vi­sion of loans to en­vi­ron­men­tally friendly firms.

"En­vi­ron­men­tal is­sues are be­com­ing more sig­nif­i­cant, af­fect­ing risks for loans dis­bursed to com­pa­nies," he said.

"If a com­pany con­ducts prac­tices that threaten the en­vi­ron­ment, its credit should also be threat­ened. So we are pre­par­ing reg­u­la­tions that would fac­tor in en­vi­ron­men­tal is­sues into the health level of the com­pany, its prod­ucts and its credit."

Clear le­gal ground is ex­pected as the out­come of the two in­sti­tu­tions' co­op­er­a­tion, both of­fi­cials said, aimed at pro­vid­ing a health­ier en­vi­ron­ment for In­done­sians.

Apart from that, tougher ground rules for com­pa­nies to ap­ply en­vi­ron­men­tally friendly prac­tices would also elim­i­nate banks' po­ten­tial bad credit due to the risks of detri­men­tal prac­tices for busi­nesses, Darmin added. BI deputy gover­nor Mu­lia­man Hadad said the BI reg­u­la­tion on green bank­ing was ac­tu­ally drafted in 2005, but needed to be eval­u­ated to de­ter­mine if it was still rel­e­vant to sup­port a sus­tain­able com­mit­ment to pro­vide a health­ier en­vi­ron­ment. "We will in­form the bank­ing in­dus­try about the new reg­u­la­tion once we have sorted things out on paper legally. -PB News

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