A Study On The Application Of Green Credit In Bank Of China

Almost everyone was attracted by an environmental event took place in Xiamen in 2007. The Dragon Aromatics project known as PX project had to change its place. In China, it was the first large project which was rejected by the habitants nearby. Because of the delay in construction and production, most of the investment including a great amount of loans from the banks became the sunk cost. Nowadays, the government and the habitants are more and more concerned in environmental issues. So, the companies are urged to build up the green operating systems, and the commercial banks which provide funds to these companies should also pay attention to green operating. It's an important issue for a bank to enable its customers to build up green operating owing to not only the social responsibility and liability but also the controlling of its own operating risks.Green-credit has been carried out abroad for almost 30 years. Most of the financial institutes have participated in Equator principles group which aimed to green-credit, and these institutes are controlling more than 85% project loans over the world. In July 2007, state environmental protection administration, the people's bank together with banking regulatory commission signed a file named 'The suggestion to fulfill environmental policies and rules to prevent credit risks'. This file can be seen as the milestone that China adopts green-credit policy officially. In these years, many domestic financial institutes including national policy banks, stocked commercial banks, and rural credit cooperatives have been trying to apply green-credit. Some banks are very successful in this area, such as Industrial Bank of China which acquired plenty returns from green-credit operations and enlarged its share in banking market.As one of the four state-owned Chinese commercial banks, Bank of China (BOC) shoulders important economic and social responsibility. There is urging necessity for BOC to carry out the green-credit operations following the pace of its peers in and abroad. This thesis will analyze the actualities that how other commercial banks carry out green-credit and suggest the strategy and details about the application of green-credit in BOC considering the actual situation of BOC.