An Evaluation of Customer Awareness towards Green Banking

An Evaluation of Customer Awareness towards Green

Banking Practices of State Bank of India

Dr. Mrs. V. P. Katti (First Author,)

Professor, Head of the Department of Economics,

Shivaji University, Kolhapur

Maharashtra, India

Miss Vaishali Vitthal Jagtap (Second Author, Corresponding Author)

M.A. SET (Maharashtra State Government), Ph.D. (Final Submitted)

At Post -Kagal, Dist – Kolhapur,

Maharashtra, India Pin code – 416216

vvjag[email protected]om

ABSTRACT:

The successful implementation of green banking initiatives depends upon the awareness

regarding the green banking initiatives. The present study is an attempt to take review of

customer awareness towards green banking initiatives undertaken by the State Bank of India

in Western Maharashtra.

The study is explorative and mainly based on primary data collected with the help of structured

questionnaire. The study is restricted to the State Bank of India. The 30 branches of SBI from

the four districts – Kolhapur, Satara, Sangali and Solapur were selected for the study. 10

customers from each selected branch of the SBI were contacted and the necessary data was

collected. The data collected was analyzed using the appropriate statistical tools. While

analyzing the customer awareness the influence of the factors like gender, age, education,

occupation etc. were taken into consideration. It is revealed from the study that nearly 32

percent of bank customers’ in the study area are aware about all 14 initiatives undertaken by

the SBI. Based on this study it is suggested that the banks have to utilize all available options

for creating awareness among customers regarding green banking initiatives.

Keyword: Green Banking; Environmental Development; Green Strategies, Customer

Awareness.

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1.0 INTRODUCTION:

Industrialization around the globe has triggered the pursuit of increasing needs of the

population and it has become a symbol of prosperity of an economy. But it has resulted into

over exploitation of natural resources. This has disturbed the ecological balance. The

disturbance in ecological balance has already affected the human life and its surrounding

environment. This in turn has raised an important issue of environmental protection. Thus, in

modern times the environmental sustainability and sustainable development have become

important agenda for the human community.

Understanding the importance of human health and well-being, governments as well as

different organizations started taking various initiatives for environmental protection and

sustainable development. A common thread running across all these initiatives is the focus on

reducing the demand for fossil fuel by implementing the practices of reduce, reuse and recycle.

Banks and financial institutions play a major and effective role in these global efforts to make

our planet a better place to live in. As providers of finance, banks ensure that businessmen

adopt environment-friendly practices. The banks undertake various initiatives which help to

reduce its carbon footprint. Such initiatives are called as green banking. Such banks conduct

their all-banking operations in eco-friendly manner with minimum negative impact on the

environment. In other words, green banking aims to make banking process and physical

infrastructure and information technology as effective and efficient as possible with zero or

minimal impact on the environment.

In recent years, Indian banks also have started taking green banking initiatives. The State Bank

of India is an Indian multinational public sector banking and financial services company. The

State Bank of India is the largest banking company in India. The State Bank has been a front

runner in green banking in India. One of the important factors deciding the success of green

banking is the awareness towards the green banking initiatives. On this background, the present

study confines to the customer awareness towards Green Banking initiatives practices by State

Bank of India.

For the implementation of green banking initiatives, a bank has to develop awareness about the

concept of green banking, green products and services and steps in green banking among the

bank staff as well as the bank customers. Because the clarity about all these aspects of green

banking on the part of different stake holders in banking services can ensure success in its

implementation. The customers of the bank consist a heterogeneous group of population. They

differ from each other in respect of age, education, gender, occupation, economic background

and banking habits etc. Therefore, their response or level of awareness towards the green

banking initiatives becomes very crucial. The SBI has undertaken various efforts to create

awareness among its customers regarding green banking initiatives. But important question

remains that whether the customers have responded positively towards green banking initiative

undertaken by the bank or they lag behind due to different hurdles. This necessitates a field

study to realize the real conditions regarding the customer awareness towards green banking

initiatives.

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2.0 OBJECTIVES OF THE STUDY:

The objectives of the study are as below

1. To find out the level of customer awareness towards green banking initiatives by the SBI.

2. To study the influence of various factors in developing customer awareness towards green

banking.

3.0 REVIEW OF LITERATURE:

There are some important studies and research work on Green Banking. Some of them have

been reviewed as below.

Bahl Sarita (2012) in her research paper entitled ‘The Role of Green Banking in Sustainable

Growth’ has highlighted the means to create awareness internal as well as external sub systems

among target groups and impart education to attain sustainable growth through green banking.

Moorthy D. & Mrs. V. Pradeepa (2014) have conducted an empirical Study on Customer

satisfaction Towards SBI Green Channel Counter in Coinmbatore city. They have used Likert

five-point scale technique to measure the customers satisfaction. Their study has revealed that

the highest mean score value was found to be 4.47 for the transaction speed of the GCC,

followed by user friendliness of GCC. This showed that customers are interested to perform

some transactions through the machine rather than doing it manually. Sharma Neetu, K.

Sarika and R. Gopal, (2015) in their research Article entitled “A study on customers

awareness on green banking initiatives in selected Public and Private sector banks with special

reference to Mumbai.” observed that the banks have not taken initiatives like communication

through press, Banks environmental policy, Concession on energy savings, Solar ATMs, Green

CDs etc. Shobharani H, Deekshitha V and Sowmyashree J. (2016) have studied the bank

employee’s perspective of Green Banking in south canara district of karnataka. The study has

focused on the awareness and perception regarding Green Banking practices and strategies.

According to the study majority of bank employees have the knowledge about Green Banking.

But full-fledged Green Banking strategies are not being adopted by the banks. Pal Naveen

(2016) has undertaken a systematic study of consumer awareness towards green banking

initiatives. This study is an attempt to find out the lacunas with respect to various green banking

initiatives and the customer awareness towards green banking initiatives.

The present study is an attempt to review the Green Banking practices and awareness among

the stakeholders in Western Maharashtra based on the primary data. It helps to the bankers to

make Green banking practices greener.

4.0 RESEARCH METHODOLOGY:

The present study is based on the primary data. The study is limited to the western Maharashtra

region, especially four important districts – Kolhapur, Sangali, Satara and Solapur. There are

153 total branches of State Bank of India in these four districts. Out of these 153 branches 67

were from urban area and remaining from the rural area. Out of these 153 branches, 30 branches

(20 percent) i.e. 7 branches from Kolhapur district, 7 from Sangali, 7 from Satara, and 9 from

Solapur were selected for the study. For selecting branches district place, tahsil place, industrial

and rural area were given due weightage applying the stratified random sampling method. 300

customers (10 from each branch) were approached by the researcher and the necessary primary

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data was collected with the help of structured questionnaire during 2017-18. While studying

customers awareness, due consideration was given to demographic segmentation such as age,

gender, education, income, period of account and residential status etc.

5.0 State Bank of India and Green Banking Initiatives:

State bank of India is an Indian multinational public sector banking and financial services

company. In terms of assets, State bank of India is the largest banking and financial services

company in India. The bank is engaged in community services activity since 1973 and sponsors

various social and welfare activities. State bank of India has been undertaking several

environmentally and socially sustainable initiatives across the country. The SBI is one of the

few banks in India to have enunciated a green banking policy since 2007. Thus the State bank

of India has paved the path for the development of green banking practiced in India.

6.0 Awareness of Bank Customers about Green Banking:

The researcher has collected the data from 300 respondents regarding the bank customer’s

awareness about the green banking initiatives.

6.1 Factors influencing the Awareness of Bank Customers about Green Banking

The bank’s efforts for greening its banking operations are meant for the benefits of public at

large and the bank customers in particular. These efforts of the banks achieve success only

when they get positive responses from the customers in respect of accepting such new banking

operations. In this respect, creating awareness about green banking concept among the bank

customers becomes essential precondition for success. The bank customers constitute different

demographic features that influence their awareness level about green banking concept. The

study has attempted to analyze all such factors.

Table 1. Consolidated Hypothesis Testing Result of Bank Customers Awareness

about Green banking

Category

Cal

Value

Tab

P = Value

Result <,

Decision

Gender wise

12.87885

3.84145

0.0003

χ² cal> χ²

tab

Reject H0

Education wise

31.39

9.48

0.0001

χ² cal> χ²

tab

Reject H0

Income wise

17.76

7.81472

0.0005

χ² cal> χ²

tab

Reject H0

Period of Account

wise

8.333

11.0705

0.1388

χ² cal< χ²

tab

Accept H0

Urban and Rural

Area wise

1.92

3.48

0.1371

χ² cal< χ²

tab

Accept H0

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Conclusions drawn from the table-1

1) Gender and Awareness: It is found that in case of male customers awareness is greater than

the female customer awareness. It means that the relationship between the gender and

awareness about green banking is significant.

2) Education and Awareness: The awareness of bank customer about green banking is

dependent on education. The study has revealed that there is a positive relationship between

level of education and the level of customer awareness about green banking.

3) Income and Awareness: The study has revealed that there exists a positive relationship

between level of income and awareness towards green banking. The level of awareness

customer with higher income is higher compared to lower income group customers.

4) Period of Account and Awareness: The table reveals that the awareness of bank customers

about green banking is independent of period of account with the bank. The awareness of bank

customers is not significantly influenced by the period of account.

5) Location Status and Awareness: The awareness about green banking is independent of

location i.e. urban or rural. It is a sign of banks effort in providing green banking services and

products in rural areas and also its efforts regarding creating awareness among the rural

customers about green banking.

6.2 Awareness of Bank Customers about Green Initiatives

The SBI has introduced various green banking initiatives for its customers. The SBI has also

undertaken various measures for creating awareness among the bank customers about the green

banking initiatives. But the bank’s success in implementation of these green banking initiatives

depends upon how much the bank customers understand the new technology based green

banking products and services and attempt to adopt the same. In other words it is the awareness

level of the bank customers about green banking initiatives which determines the bank’s

success in its implementation. Therefore, the study has attempted to present the level of

awareness of the bank customers about the various important green banking initiatives

undertaken by the SBI in the area under study. This is presented in table-2.

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Table-2. Awareness of Bank Customers about Green Initiatives

Green Initiatives

Aware

Neutral

Not

Aware

Total

Green Checking

158

300

(52.67)

(15)

(32.33)

(100)

Green Loans

276

300

(4.67)

(3.33)

(92)

(100)

Iii

Green Mortgages

280

300

(4.33)

(2.33)

(93.33)

(100)

Green CDs

(13.67)

(4.33)

246

(82)

300

(100)

Facility of E-statement

106

(35.33)

19 (6.33)

175

(58.33)

300

(100)

Facility of Online Banking

142

(47.33)

(11.67)

123

(41)

300

(100)

Vii

Reduced use of paper

228

(76)

(10.67)

(13.33)

300

(100)

Viii

Use of Solar Powered ATM

(2.67)

292

(97.33)

300

(100)

Energy efficient branch

157

(52.33)

(5.67)

126

(42)

300

(100)

Providing recyclable Debit and

Credit Cards

(21)

(5)

222

( 74)

300

(100)

Online Bill Payment

138

(46)

(4.33)

149

(49.67)

300

(100)

Xii

Controlled use of Water and

Rainwater Harvesting

(29.33)

(3.67)

201

(67)

300

(100)

Xiii

Bank Environmental Policy

(16.67)

(4.33)

237

(79)

300

(100)

Xiv

Mobile Banking

145

(48.33)

(8.33)

130

(43.33)

300

(100)

Total

1343

(31.98)

263

(6.26)

2594

(61.76)

4200

(100)

Statistical Result

Mean

95.93

(31.98)

18.79

(6.26)

185.29

(61.76)

300

(100)

68.22

11.35

77.12

0.71

0.60

0.42

Source: Field Work

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Statistical analysis:

: bank customers are significantly not aware about the initiatives of green banking

undertaken by SBI.

: bank customers are significantly aware about the initiatives of green banking undertaken

by SBI

Sample mean = 31.17, sample variance = 9.32

Z cal= 17.97, at 5% level of significance Z table = 1.64

P value = 0.0001,

As ‘P’ value < 0.005, Reject H0.

Hence, it is concluded that bank customers are significantly aware about the initiatives of green

banking undertaken by SBI.

It is clear from the table that nearly 32 percent of bank customers in the study area are aware

about all 14 green banking initiatives provided by the SBI. The highest percentage of awareness

i.e. 76 percent is found in case of reduced use of paper which is directly helpful in environment

conservation. On the other hand, no customer knows about the solar powered ATM. This shows

the lack of initiative regarding deployment of solar powered ATM in the study area, even

though there is greater potential for the use of solar power for ATM. The second important

thing found from the table is that in case of green checking and energy efficient branch, the

bank customer’s awareness level is more than 52 percent. Similarly, in case of facility of mobile

banking, online banking and online bill payment, the bank customers awareness level is 48, 47

and 46 percent respectively. It is clear from given figures that the customers awareness

regarding these major green banking initiatives is significant.

Further, more than 20 percent bank customers are aware about controlled use of water and rain

water harvesting and providing recyclable debit and credit cards to the customers. In case of

green loans and green mortgages the bank customers awareness level is below 5 percent. In

this respect and use of solar powered ATMs, the SBI has to give more attention in the coming

years.

7.0 CONCLUSION:

Green banking initiatives have proved helpful in preserving environmental balance and

achieving sustainable development. The SBI the largest public sector bank has remained a

leading bank in introducing green banking practices in India. The SBI has undertaken efforts

for creating the awareness about green banking among the bank customers.

The study has revealed that the SBI has achieved satisfactory achievement in this respect in the

study area. But it is suggested on the basis of this study that the SBI has to undertake intensive

efforts to create the customers awareness regarding all green banking initiatives.

References

1) Bahl Sarita. (Feb-12) The Role Green Banking in Sustainable Growth. International Journal

of Marketing Financial Services and Management, Vol.No .2 ( Feb -12 ) ISSN 2277 3622.

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2) Annadurai A. (2014) Effectiveness of Green Banking Technology of Commercial Banks in

India, International Journal of Research in Commerce and Management, 5(12).

3) Ch Sreesha (2014) A Study of Green Banking Initiatives of selected Private and Public Sector

banks in India International Journal of Research ISSN 2348-6848, Vol. I(7), pp 807-815.

4) Moorthy D. and Mrs. Pradeepa V. (2014) Customer satisfaction Towards SBI Green Channel

Counter – An Empirical Study International Journal of Informative and Futuristic Research,

vol.12, Issue 2 , oct 2014. Page 319-325.

5) Sharma, N., K, S., and Gopal, R. (2015) A study on customers awareness on green banking

intiatives in selected Public and Private sector banks with special reference to Mumbai. IOSR

Journal of Economics and finance (IOSR-JEF), e- ISSN:23215933, p-ISSN: 2321-5925 PP 28-

35 www.iosrjournals.org

6) Shobha C. K., Sarala K. S. (2016) 'Green Banking Initiatives: problems and prospects in state

Bank of India, Shivmoga City.'

7) Shobharani H. Deekshitha V. and Sowmyashree J. (2016) Green Banking: the Bank Employees

Perspective Proceedings.

8) Pal Naveen (2016) A Systematic study of Customer Awareness Towards Green Banking

Initiatives, proceeding pp.167-169

9) Sharma Garima (2017) Conceptual Analysis of Green Banking In India And Abroad, National

Journal of Arts, Commerce and Scientific Research Review, Jan –June-2017/vol04/ISS-1/A9,

page 75-81.

10) Thomas Jitha, Linson Silby, (2018) Customers' Awareness and Adoption of Green Banking in

Thrissur District. ISSN: 2319-5770, e-ISSN 2394-1138.

11) Indian Banks Association (2014 Mar) Green Banking Innovations, Indian Banks Association.

The Indian Banker: http//www.theindianbanker.co.in/html/sto 5 htm.

12) SBI’s fourth Sustainability Report for 2018 to 2019 “Spearheading Digital India- Banking

Solutions for a Sustainable Tomorrow”.

13) State Bank of India Quarterly Year 2019 Results, Digital Journey.

14) State Bank of India Quarterly Year 2020 Results, Innovative Technology, YONO App.

15) RBI Report 2013 Booklet

16) Reserve Bank of India. Bank wise Debit Cards and Credit cards statistical Report 2010 to Oct

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DECLARATIONS

I. List of Abbreviations

1. SBI – State Bank of India

2. GCC- Green Channel Counter

3. ATM – Automatic Teller Machine

II. Ethics approval and Consent to Participate

Not Applicable

III. Consent for Publication

Not Applicable

IV. Availability of Data Materials

The data can’t be shared with you as this data is related with government of India’s public

sector bank State Bank of India. So data materials can’t be shared to international entities.

V. Competing Interest

This research paper doesn’t have many co -authors.

VI. Funding

I don’t have received any funding from any entity, organization and Institution. This research

is solely funded by me.

VII. Author’s Contribution:

VJ prepared the plan of data collection which includes selection of SBI branches and the

questionnaire for collecting data from the bank customers under the Guidance of VK. The plan

of data collection and particularly questionnaire was framed and finalized by VK.

The required primary data was collected and draft plan of its statistical analyzation was

prepared by VJ which was corrected and finalized by VK. Collected data was analyzed and

conclusions were drawn by VJ and the final shape was given by VK.

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