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Impact of Green Finance on Banking System Structure: Evidence from Bangladesh
Md. Jahangir Alam Siddikee
Abstract: The study aims at inspecting the effect of green finance (GF) on banking system Structure (BSS)- number of branches (NB), total assets (TA), deposits (DA), share in industry assets (SIA), share in industry deposits (SID). GF and banking system structure indicate a fundamental reorientation of the financial landscape toward sustainability, where banking institutions strategically integrate environmental thoughtfulness into their core operations. This evolution entails the development of innovative financial green products. As banks increasingly prioritize environmentally responsible investments, assets committed to green initiatives grow, bolstered by deposits from individuals and businesses seeking to support sustainable development. Concurrently, banks are expanding their branch networks to cater to the rising demand for green financial services, offering specialized products and expertise in environmentally responsive investment opportunities. This study applies the regression models (panel ordinary least square, fully modified ordinary least square, random effect model, and fixed effect model) on the data collected from the annual reports of the Bangladesh Bank from 2015 to 2023. It is found in this study that GF has a significant impact on BSS.