Role of banking sector in green economic growth: empirical evidence from South Asian economies

Abstract

The COVID-19 pandemic has slowed progress to the achievement of net-zero and sustainability goals. In particular, emerging economies may benefit greatly from the cooperation of banking institutions in promoting green recovery. This study focusses on banking institutions in South Asian countries that boost the intermediary financial spread, according to a thorough sample of banks from 2011 to 2021. The analysis employs the data envelopment analysis method, and the results are robust. In addition to these characteristics, we also consider aspects such as urbanisation, industrialisation, and population expansion. Banks may play a significant role in facilitating the realisation of environmental targets because of the clear advantages of the results, which provide comfort for green recovery. As green financing may lead to more efficient and robust financial systems, the results provide strong evidence for policymakers, financial institutions, and the financial sector.