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Banking for a greener future: a systematic review of sustainable initiatives in South Asia

Author

Listed:
  • Muhammad Ashar Asdullah

    (York St John University)

  • Waqas Ahamd Watto

    (Superior University Lahore)

  • Ali Ijaz

    (The Islamia University of Bahawalpur)

  • Muhammad Zeshan

    (University of the Punjab)

Abstract

The expanding role of green banking in South Asia is examined in this study, with an emphasis on how financial institutions are balancing economic growth with environmental sustainability. Natural resource depletion and climate change are two major environmental issues facing South Asian nations, which is why banks in the region are embracing green practices like ecofriendly loans, green investments, and sustainable products. The effectiveness of these measures is investigated, as are the particular challenges that banks encounter, such as legal constraints and striking a balance between environmental goals and economic expansion. This study offers insights into the many green banking tactics, the function of central banks and regulatory agencies, and the wider effects of these activities on sustainability by completing a thorough literature analysis. Key findings highlight the need for stronger regulatory frameworks, enhanced risk assessment mechanisms, and tailored green banking products that address the region’s specific needs. This study further identifies policy gaps and recommends future research directions to strengthen South Asia’s green finance landscape, emphasizing resilience against climate-related financial risks. Ultimately, the findings aim to guide policymakers, financial institutions, and stakeholders in fostering a sustainable and resilient banking sector in South Asia, aligning with global environmental goals while addressing regional priorities.

Suggested Citation

  • Muhammad Ashar Asdullah & Waqas Ahamd Watto & Ali Ijaz & Muhammad Zeshan, 2025. "Banking for a greener future: a systematic review of sustainable initiatives in South Asia," Journal of Banking Regulation, Palgrave Macmillan, vol. 26(3), pages 610-626, September.
    • Handle: RePEc:pal:jbkreg:v:26:y:2025:i:3:d:10.1057_s41261-025-00279-w
    DOI: 10.1057/s41261-025-00279-w
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    References listed on IDEAS

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    1. Ivan Diaz-Rainey & Jan Corfee-Morlot & Ulrich Volz & Ben Caldecott, 2023. "Green finance in Asia: challenges, policies and avenues for research," Climate Policy, Taylor & Francis Journals, vol. 23(1), pages 1-10, January.
    2. Vo, Duc, 2019. "The Impact of Foreign Direct Investment on Environment Degradation: Evidence from Emerging Markets in Asia," MPRA Paper 103292, University Library of Munich, Germany.
    3. Meenakshi Sharma & Akanksha Choubey, 2022. "Green banking initiatives: a qualitative study on Indian banking sector," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(1), pages 293-319, January.
    4. Anh Hoang To & Dao Thi-Thieu Ha & Ha Minh Nguyen & Duc Hong Vo, 2019. "The Impact of Foreign Direct Investment on Environment Degradation: Evidence from Emerging Markets in Asia," IJERPH, MDPI, vol. 16(9), pages 1-24, May.
    5. Fatema Khairunnessa & Diego A. Vazquez-Brust & Natalia Yakovleva, 2021. "A Review of the Recent Developments of Green Banking in Bangladesh," Sustainability, MDPI, vol. 13(4), pages 1-21, February.
    6. Jaweria Yameen & Ploypailin Kijkasiwat & Anwar Hussain & Muhammad Azhar Farooq & Tahira Ajmal, 2024. "Green finance in banking industry: a systematic literature review," SN Business & Economics, Springer, vol. 4(8), pages 1-28, August.
    7. Zbigniew Korzeb & Paweł Niedziółka & Danuta Szpilko & Filippo Pietro, 2024. "ESG and climate-related risks versus traditional risks in commercial banking: A bibliometric and thematic review," Future Business Journal, Springer, vol. 10(1), pages 1-22, December.
    8. Hyoungkun Park & Jong Dae Kim, 2020. "Transition towards green banking: role of financial regulators and financial institutions," Asian Journal of Sustainability and Social Responsibility, Springer, vol. 5(1), pages 1-25, December.
    9. Yinqiao Li, 2023. "Role of banking sector in green economic growth: empirical evidence from South Asian economies," Economic Change and Restructuring, Springer, vol. 56(4), pages 2437-2454, August.
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