INTRODUCTION:

In recent years, the global banking sector has witnessed a significant shift towards environmental sustainability, driven by growing concerns over climate change and corporate social responsibility.

Within this context, green banking initiatives have emerged as a key strategy for banks to mitigate environmental risks, enhance their reputation, and contribute to sustainable development goals. While considerable attention has been given to green banking practices in the private sector, relatively little research has focused on their implementation and impact within public sector banks.

This study aims to fill this gap by investigating the effect of green banking initiatives on the performance of public sector banks. By examining the adoption and outcomes of environmentally sustainable practices within the public banking sector, this research seeks to elucidate the relationship between green banking strategies and key performance indicators such as profitability, risk management, and customer satisfaction. Through a comprehensive analysis, this study aims to provide valuable insights for policymakers, bank management, and stakeholders seeking to promote sustainability within the banking sector.

REVIEW OF LITERATURE:

Jeucken and Bouma (1999), “The changing environment of banks”, this study explores how banks are adapting to environmental changes by integrating sustainable development goals into their operations. It highlights the importance of green banking in mitigating environmental risks and promoting sustainability.

Scholtens (2006), “Finance as a driver of corporate social responsibility”, Scholtens discusses the role of finance in promoting corporate social responsibility (CSR). The study finds that integrating green banking practices enhances the CSR profile of banks, leading to improved financial performance and risk management.

Flammer (2013), “Corporate social responsibility and shareholder reaction: The environmental awareness of investors”, Flammer investigates the relationship between green banking practices and shareholder reactions. The study shows that banks adopting green initiatives are perceived more favorably by investors, leading to higher market performance.

Weber, Fenchel, and Scholz (2015), “Empirical analysis of the integration of environmental risks into the credit risk management process of European banks”, this research examines how European banks incorporate environmental risks into their credit risk management processes. The findings indicate that green banking practices lead to improved risk management and financial performance.

Khan, Khan, and Ahmed (2018), “The impact of green banking on customer satisfaction: Evidence from commercial banks in Bangladesh”, the study investigates the effect of green banking on customer satisfaction in Bangladeshi banks. It finds that customers are more satisfied with banks offering green products and services, leading to higher retention rates.

OBJECTIVES OF THE STUDY:

· To assess the extent of opinion about the green banking initiatives by public sector banks.

· To analyze the satisfaction of green banking practices on the profitability of public sector banks.

· To investigate the usage and influence of green banking strategies on customer satisfaction and loyalty within the public banking sector.

DATA ANALYSIS AND FINDINGS:

Opinion about the use of Green banking services:

The data provided shows the opinions of 250 respondents regarding the use of green banking services. The responses are categorized into "Yes" and "No," with the corresponding number of respondents and their percentages.

Table 1 Opinion about the use of Green banking services

S. No	Opinion about the use of green banking services	No. of respondents	Percentage
1	Yes	150	60
2	No	100	40
	Total	250	100%

Sources: Primary Data

The data shows that green banking services have been adopted by a majority of the customers, with 60% of respondents indicating they use these services. This high adoption rate suggests that green banking initiatives are gaining traction among public sector bank customers. With 40% of respondents not using green banking services, there is a significant potential market that banks can target. Efforts to educate and promote the benefits of green banking could convert more customers to adopt these services. Public sector banks can leverage this information to enhance their green banking offerings, focusing on the reasons why 40% of the respondents are not using these services. Understanding and addressing the barriers to adoption can help increase the overall usage rate.

Frequency of usage of green banking services:

The data provided shows the frequency of usage of green banking services by 250 respondents, categorized into four time periods. Each category indicates the number of respondents and their respective percentages.

Table 2 Frequency of usage of green banking services

S. No	Frequency of usage of green banking services	No. of respondents	Percentage
1	Less than 1 year	60	24
2	1 – 5 Years	115	46
3	6 – 10 years	50	20
4	Above 10 years	25	10
	Total	250	100 %

Sources: Primary Data

Nearly a quarter (24%) of the respondents have been using green banking services for less than a year. This indicates a significant recent adoption of green banking services, suggesting growing interest and awareness among customers. The majority (46%) of the respondents have been using green banking services for 1 to 5 years. This shows a strong base of users who have moderately long-term experience with green banking services, indicating steady growth and adoption over the past few years. 20% of the respondents have been using green banking services for 6 to 10 years. This suggests that a significant portion of users have a long-term commitment to green banking, reflecting satisfaction and sustained usage. A smaller segment (10%) of the respondents have been using green banking services for over 10 years. This indicates a dedicated group of long-term users who were early adopters of green banking services.

Customers influences of green banking services:

The data provided ranks various problems faced by customers with different banking services (ATM, Internet, Telephone, and Mobile Banking) based on mean scores. Each issue is evaluated and ranked accordingly.

Table 3. Customers influences of green banking services

S. No	Statement	Total	Mean score	Rank
I	ATM Service Problems
1	Cards get blocked	284	2.84	8
2	Machine out of cash	284	2.84	8
3	Non printing of statement	288	2.88	7
4	Machine out of order	266	2.66	11
5	long waiting time in queues	244	2.44	14
6	Reduction in balance without cash payment	264	2.64	12
II	Internet Banking Services problems
7	Not providing information	208	2.08	16
8	Not being able to maintain security	218	2.18	15
9	Not giving fast response	248	2.48	13
10	Leaving the operation unfinished	192	1.92	17
11	Internet banking can be tampered with by others	268	2.68	10
12	Waiting for long time for conducting of transactions	272	2.72	9
13	Too many steps in processing transaction	308	30.8	6
III	Telephone Banking Service Problems
14	Lack knowledge of customer service representative	350	3.50	2
15	Absence immediate connection to the service	336	3.36	3
16	Lack of prompt service	312	3.12	5
17	Lack of clear guidelines.	338	3.38	1
IV	Mobile Banking Service Problems
18	Login / Sign off are not easy	338	3.38	1
19	Lack of security in transactions	338	3.38	1
20	Lack of appropriate software	316	3.16	4

Sources: Primary data

The most pressing issues are "Non printing of statement" (mean score 2.88, rank 7), "Cards get blocked" and "Machine out of cash" (mean score 2.84, rank 8). Issues like "Machine out of order" (mean score 2.66, rank 11), "Reduction in balance without cash payment" (mean score 2.64, rank 12), and "Long waiting time in queues" (mean score 2.44, rank 14) are less problematic but still notable. The most significant problem is "Too many steps in processing transactions" (mean score 3.08, rank 6). Problems like "Waiting for a long time for conducting transactions" (mean score 2.72, rank 9), "Internet banking can be tampered with by others" (mean score 2.68, rank 10), and "Not providing information" (mean score 2.08, rank 16) are also relevant. “Leaving the operation unfinished" (mean score 1.92, rank 17) is the least problematic issue reported. The highest concerns are "Lack of clear guidelines" (mean score 3.38, rank 1), "Lack knowledge of customer service representative" (mean score 3.50, rank 2), and "Absence immediate connection to the service" (mean score 3.36, rank 3). "Lack of prompt service" (mean score 3.12, rank 5) is also a significant concern but ranks slightly lower than the others. Key issues include "Login / Sign off are not easy" (mean score 3.38, rank 1), "Lack of security in transactions" (mean score 3.38, rank 1), and "Lack of appropriate software" (mean score 3.16, rank 4). These problems indicate a general concern with usability and security in mobile banking services.

Customer satisfaction of green banking services:

The data provides mean scores and rankings for various problems and aspects of ATM services, Internet banking services, telephone banking services, and mobile banking services based on customer feedback.

Table 4 Customer satisfaction of green banking services

S. No	Statement	Total	Mean score	Rank
1	ATM Services
	Promptness of card delivery	381	3.81	7
	Number of transaction	368	3.68	9
	The quality of notes (currency)	403	4.03	4
	Conveniently located	385	3.85	6
2	Internet Banking Services
	Account Information and Balance Enquiry	352	3.52	10
	E – Payments	343	3.43	14
	Account to account transfer	351	3.51	11
	Due installment enquiry	323	3.23	16
	Statement request (by mail, fax,)	311	3.11	17
3	Telephone Banking Services
	Pleasant musical background	419	4.19	1
	Reasonable number of voice prompts	350	3.50	12
	Clear instructions	336	3.36	15
	Voice directions / on line directions for new users	391	3.91	5
	Provide additional options	340	3.40	15
4	Mobile Banking Services
	Reward point status	413	4.13	2
	Prepaid mobile recharge	344	3.44	13
	SMS alerts about specific information to the bank services / new products	403	40.3	4
	Transactions status	405	40.5	3
	Expensive	375	3.75	8

Sources: Primary data

The quality of notes (currency) received the highest score (4.03, rank 4), indicating customers are generally satisfied with the currency quality. Other highly rated aspects include conveniently located ATMs (3.85, rank 6) and promptness of card delivery (3.81, rank 7). The number of transactions scored relatively lower (3.68, rank 9), suggesting room for improvement in transaction convenience or limits. Account Information and Balance Enquiry (3.52, rank 10) and account-to-account transfer (3.51, rank 11) are moderately rated, indicating decent satisfaction. Statement request (3.11, rank 17) and due installment enquiry (3.23, rank 16) received the lowest scores, pointing to areas where customers face the most dissatisfaction or challenges. Pleasant musical background (4.19, rank 1) is the highest-rated aspect, indicating a positive customer experience. Voice directions for new users (3.91, rank 5) is also rated high. Clear instructions (3.36, rank 15) and providing additional options (3.40, rank 15) scored lower, highlighting potential areas for improvement in clarity and service options. Transactions status (4.05, rank 3) and SMS alerts about specific information (4.03, rank 4) are highly rated, showing strong customer approval. Reward point status (4.13, rank 2) is also very positively received. Prepaid mobile recharge (3.44, rank 13) and perceptions of the service being expensive (3.75, rank 8) scored lower, indicating areas where customers feel less satisfied.

SUGGESTIONS:

Suggestions for Customers:

· Utilize Online and Mobile Banking: Customers should leverage online and mobile banking platforms to reduce their carbon footprint by minimizing paper usage and reducing the need for physical visits to the bank.

· Subscribe to E-Statements: Opt for electronic statements instead of paper statements to contribute to environmental conservation.

· Use ATMs Wisely: Plan transactions to minimize the number of visits to ATMs, thus saving energy and reducing the carbon footprint associated with frequent transactions.

· Reduce Printing Needs: Avoid printing receipts unless necessary. Many banks offer the option to receive transaction details via email or SMS.

· Choose Green Banking Products: Look for and support banks that offer eco-friendly banking products and services, such as green loans for energy-efficient home improvements or electric vehicles.

· Participate in Green Initiatives: Engage in and support banks’ green initiatives and community programs aimed at environmental sustainability.

· Stay Informed: Keep informed about the environmental impact of banking activities and the benefits of green banking.

· Spread Awareness: Encourage friends and family to adopt green banking practices and support banks with strong environmental policies.

Suggestions for Banking Sectors:

· Develop Eco-Friendly Products: Design and promote banking products that have positive environmental impacts, such as green mortgages, green loans, and eco-friendly credit cards.

· Incentivize Green Practices: Offer incentives such as lower interest rates or fee waivers for customers who adopt green practices, like energy-efficient home improvements or purchasing electric vehicles.

· Invest in Technology: Invest in robust and secure digital banking platforms to provide seamless online and mobile banking experiences, reducing the reliance on paper and physical bank visits.

· Encourage Digital Transactions: Promote the use of digital transactions by providing easy-to-use interfaces, reliable mobile apps, and customer education on digital banking benefits.

· Green Branches: Retrofit branches with energy-efficient lighting, renewable energy sources, and other green technologies to reduce the carbon footprint.

· Paperless Banking: Encourage a shift towards paperless banking by digitalizing records and processes, and promoting e-statements and digital contracts.

· Awareness Campaigns: Launch awareness campaigns to educate customers about the benefits of green banking and how they can contribute to environmental sustainability.

· Feedback Mechanisms: Establish channels for customer feedback on green banking initiatives to continuously improve and align with customer expectations and environmental goals.

· Green Investments: Prioritize investment in sustainable and environmentally friendly projects, including renewable energy projects and green infrastructure.

· Responsible Lending: Implement policies for responsible lending that favour projects with minimal environmental impact and encourage businesses to adopt sustainable practices.

· Partnerships: Collaborate with government bodies, non-profits, and other organizations to promote and support environmental sustainability initiatives.

· Community Engagement: Engage with the community through programs and events that promote environmental awareness and sustainability.

CONCLUSION:

While a significant majority of customers are using green banking services, there remains a substantial opportunity for public sector banks to expand their reach and enhance the adoption of green banking initiatives. The data indicates a healthy mix of recent adopters and long-term users of green banking services. Public sector banks can leverage this information to tailor their strategies, ensuring continued growth and satisfaction among their customer base. Indicates a healthy mix of recent adopters and long-term users of green banking services. Public sector banks can leverage this information to tailor their strategies, ensuring continued growth and satisfaction among their customer base. The importance of addressing specific service problems to enhance customer satisfaction with banking services. Public sector banks can leverage this information to prioritize improvements and strategic initiatives aimed at resolving these issues effectively. While there are several areas where customers are satisfied with the banking services provided, there are notable areas needing improvement. Addressing these will help enhance the overall customer experience and satisfaction with public sector banks. Adopting green banking initiatives is essential for both customers and banking sectors to mitigate environmental impacts and promote sustainability. Customers can contribute by embracing digital banking, reducing paper usage, and supporting eco-friendly banking products. Meanwhile, banking sectors can lead by example through the development of green products, enhancing digital infrastructure, implementing sustainable practices, and engaging in customer education and community collaboration. Together, these efforts will drive the transition towards a more sustainable and environmentally conscious banking system.

ACKNOWLEDGEMENT:

One of the author M. Narayanan, gratefully acknowledges the Tamil Nadu State Council for Science and Technology (TNSCST), Chennai, for its financial support in the form of Research Funding for Research Scholar (RFRS) – 2021-22, (TNSCST/RFRS/VM/ 10/2021-22).

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Received on 09.07.2024 Modified on 11.08.2024

Asian Journal of Management. 2024;15(3):256-260.

DOI: 10.52711/2321-5763.2024.00040