OREANDA-NEWS. April 17, 2013. Board Chairman Gao Jianping of Industrial Bank (IB), a CPPCC member, pointed out in the interview with the reporter of Xinhua News Agency that China had insufficient financial services in the field of energy conservation and environmental protection.

To encourage financial institutions to develop “green finance”, he recommended the regulatory authorities to issue the rules for the certification of green finance projects as soon as possible, so as to provide guidance for commercial banks to get involved in green finance projects and unify the statistical standard for green credit.

“At present, green financing only accounts for 1% of the assets of Chinese commercial banks, far from meeting the actual demands, as the deficiency of funds amounts to 20 times as great as the existing financing.” Gao Jianping said, “The pivot role of banks in distributing resources should be brought into full play. We should vigorously develop green finance, guide and actuate social capital to flow and assemble toward the areas featuring low energy consumption, low emission, low pollution and high efficiency, and actively push the transformation of economic development model and industrial conversion and upgrading, so as to accelerate the construction of ‘Beautiful China'”.

In 2013, Chairman Gao indicated, IB would continue its concept of “green finance” that it has adhered to for years in the past, give greater support to green finance, innovate in the product family in the business of green finance, and in particular, research and make innovation in financial services and products in the field of utilization and protection of water resources. By the end of 2012, IB has accumulatively extended nearly RMB 200 billion green finance based financing to around a thousand enterprises, with financing balance of green finance exceeding RMB 110 billion.

To encourage banks to develop green finance, Chairman Gao suggested, we may, at the level of regulatory authorities, encourage banks to issue special financial bonds for the business of green finance. We should improve the policy environment for green finance and set down differentiated regulatory and incentive policies. “For instance, the green finance based loans meeting the given requirements may be allowed not being covered into the scope of loan-deposit ratio evaluation, and higher tolerance to non-performing loan and looser policy for writing off non-performing and bad debts may be given to green finance based financing meeting the given requirements”.

In addition, Chairman Gao also recommended giving financial and tax-related support to green finance, and reducing the business tax rate of commercial banks in handling green finance business and relevant income tax rates.

It is reported that IB is the first Chinese bank releasing energy conservation and emission reduction loan, energy-efficient financing, carbon finance and environmental finance, and also the only Chinese bank promising to follow the “Equator Principles” at present. The “Equator Principles” are a set of voluntary guidelines for the finance industry initiated and established by major financial institutions around the world, aiming to judge, evaluate and manage environmental and social risks in project financing. Banks adopting the principles are called “Equator banks”.