1 A bit about JS BANK A bit about JS BANK Commercial bank, - - PowerPoint PPT Presentation

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A bit about JS BANK

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• Commercial bank, majority-owned subsidiary of Jahangir Siddiqui & Co. Ltd.
• 345 branches in 172 cities, with total deposits of PKR 321 billion as at Dec

31, 2018

• 4626 employees (approximately 13% females)
• Commenced operations in Pakistan as a fully scheduled bank on December 30,

2006

• First international branch in Manama, Bahrain; plans to expand further in the

GCC

• Service offerings include trade finance, treasury, institutional banking, corporate

banking, and private banking & wealth management

A bit about JS BANK

Steps JS BANK has taken for becoming more sustainable

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• Second commercial bank in South Asia to be a GCF accredited entity

A signal that we meet GCF’s stringent standards which are based on

financial standards, environmental and social safeguards, and a gender plan and that we have specialized capacities in driving climate action.

• Incorporated Environmental and Social Risk (ESR) Rating Template into our

credit application for loans

All credit applications at JS Bank now undergo an ESR rating, based on

IFC’s Performance Standards 1 – 8 with an impact rating of A (highest), B ( medium) or C (minimal)

• With its extensive presence across the country ensuring that all regions have

access to climate finance, the Bank has various products geared towards this:

JS Smart Roshni JS Ghar Apna Solar Financing JS Zarkhez Solar Tube Well Steps JS Bank has taken for becoming more sustainable

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Steps JS Bank has taken for becoming more sustainable

• First commercial bank in Pakistan to have an ESG Report

A way for effective disclosure to both communicate what we are already

doing and engage in active dialogue to learn and understand what more can be done.

• First commercial bank in Pakistan to be a WWF-certified Green Office

Green Office is an Environmental Management System designed for offices.

It creates awareness among employees to take steps for energy conversation and waste management. JS Bank is undertaking various initiatives for energy efficiency and reduce resource consumption

• One of few banks to actively take part in public policy concerning sustainability

and sustainable finance

A member of various political forums such as the MoCC Working Group on

Green Finance and SBP’s Focus Group on Green Banking Guidelines. Both forums have been created by government agencies to spread awareness about sustainability and methods we can use for climate mitigation and adaptation

GCF accreditation

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• GCF works through a wide range of Accredited Entities and recognizes that

individual organizations possess the type of specialist knowledge and experience that can be best utilized to mobilize climate finance on the ground and to channel its financial resources to climate change projects and programs.

• The accreditation process assesses whether applicants are capable of strong

financial management and of safeguarding funded projects and programs against any unforeseen environmental or social harm.

• By gaining GCF accreditation, JS Bank was able to signal that we meet GCF’s

stringent standards which are based on fiduciary standards, environmental and social safeguards, and a gender plan and that we have specialized capacities in driving climate action.

GCF accreditation

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• We introduced or updated the following policies:
• Environmental and Social Safeguards Policy
• Exclusions list
• E&S risk rating
• Gender Policy
• Human resources
• Gender mainstreaming
• Procurement Policy
• Procurement oversight of third party projects
• Integrity of the process is maintained
• Information Disclosure Policy
• Transparency and accountability
• Disclosure of E&S reports within certain timelines

GCF accreditation

Implementing SBP’s Green Banking Guidelines (GBG)

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• Banks have banking relationships with companies that are polluters or could be

in the future.

• State Bank of Pakistan has issued Green Banking Guidelines (GBG) to reduce

vulnerability of banks from risks arising from environmental and social causes, fulfill their responsibilities for the protection of environment and provide finance to transform the economy into a resource efficient and climate resilient one.

• In line with GBG, JS Bank has introduced an Environmental and Social Risk

Rating Matrix as part of the credit application process which is applicable on both current and prospective clients for fresh and renewal of current limits. We also actively look at increasing our product portfolio with a focus on SMEs and renewable energy. We are also doing various cost-cutting initiatives to reduce

• ur carbon footprint and environmental impact.

Implementing SBP’s Green Banking Guidelines (GBG)

Incorporating environmental and social risk rating

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The Environmental and Social Risk Rating (ERR) mechanism is designed in to assess the impact and probability of all the possible risk on which the environment might be exposed. The ERR template covers the IFC’s 8 performance standards and is a tool for screening the bank’s future lending. The template is divided in 3 sections with total of 10 questions:

• Initial Transaction Screening: Policies and Standards
• Environment and Climate Change
• Climate Business and its Periphery

Incorporating environmental and social risk rating

Promoting sustainable products

JS Bank has various environmentally-friendly products geared towards promoting renewable energy and energy efficiency. When coming up with these products, various factors have to be kept in mind:

• Households want cheaper systems and good quality service while suppliers

require a reasonable market-based profit to stay in business

• Making systems compatible with the social, cultural, and economic activities of

targeted households

• Establishing good partnerships for an available supply for products and

services (JS Bank has partnered with over 15 solar vendors)

• Training off-grid customers in basic troubleshooting

Promoting sustainable products

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This is smart solar panel financing solution to businessmen of Pakistan, to become less dependent on the grid for energy requirements.

Target Market:

SMEs generating electricity, ranging from 4 to 100 KW*, for commercial and/or industrial consumption.

Product Features:

• Financing: Between PKR 0.5 – 10 Million
• Equity: Minimum 20% of the financing amount
• Markup: Fixed at 6% per annum
• Tenure: Between 3 - 5 Years, with repayment in monthly installments
• Collateral: Solar Panel are marked under Hire Purchase Agreement to JS Bank

*For farmers with above 100KW to 1 MW requirement, JS Banks offers the above terms but takes full collateral

JS Smart Roshni

Promoting sustainable products

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JS GharApna Solar Panel offers a comprehensive financing solution for installation

• f the solar panel system at residential locations.

Target Market:

Providing financing solutions for generating electricity for residential consumption ranging from 4 KW and above.

Product Features:

• Financing: Between PKR 0.5 – 2 Million
• Equity: Minimum 25% of the financing amount
• Markup: Fixed at 6% per annum
• Tenure: Between 1 - 5 Years, with repayment in monthly installments
• Collateral: Solar Panel are marked under Hire Purchase Agreement to JS Bank

JS GharApna Solar Panel Financing

Promoting sustainable products

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Solar Tube Well for the farms enables hassle free extraction of water from the ground for drip irrigation, watering the fields & livestock.

Target Market:

Farming community engaged in any kind of agricultural activity

Product Features:

• Financing: Between PKR 0.5 – 2.5 Million
• Equity: 20% of Solar Tube well value
• Markup: Fixed at 6% per annum
• Tenure: 3 - 5 Years with repayment in quarterly installments(including insurance premium)
• Collateral: Bank’s charge on agriculture land/ rural or urban property

JS Zarkhez Solar Tube Well

Promoting sustainable products

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Our target is to address the electricity shortfall by utilizing the renewable energy by target various groups.

• JS Smart Roshni – Business
• JS GharApna Solar Panel – Residential Areas (Bungalows)
• JS Zarkhez Solar Tube Well - Farmers

Profile of potential customers

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Our target is to address the electricity shortfall by utilizing the renewable energy by target various groups.

• JS Smart Roshni – Business
• JS GharApna Solar Panel – Residential Areas (Bungalows)
• JS Zarkhez Solar Tube Well - Farmers

Profile of potential customers

Challenges faced promoting sustainable products

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• Lack of awareness of solar panel technology
• Even though there is growing awareness of solar products, it still has not penetrated deeply

into far-flung areas. In such areas, customers lack basic knowledge for troubleshooting of solar products

• Technical knowledge at branch levels
• Since solar panels are a relatively new product, many bank branches are unaware of their

benefits and after-sales service. This makes it hard to convince and sell to probable

• customers. Because of improperly sized systems, there can be lost efficiency and higher

cost per unit of electricity

Challenges faced promoting sustainable products

Challenges faced promoting sustainable products

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Poor Secondary Market of Solar Panels

• There is a missing secondary market for selling and purchasing of second

hand solar panels. We have many buy-back arrangement with our vendors but there is still resistance shown since there is a lacking market

Quality of solar panels supplied

• Use of poor-quality system components means inferior system components

need to be replaced more often. Lack of an independent technical committee exacerbates the problem.

US – Pakistan Clean Energy Partnership

JS Bank is collaborating with USAID to:

• Create a sustainable and efficient renewable energy environment in a

responsible and environmentally friendly manner

• Allow small scale energy projects access to long term rupee financing through

JS bank

• Encourage private investment in clean energy

US – Pakistan Clean Energy Partnership

Promoting sustainable products

Reducing our own impact

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• Cost Cutting Initiative in branches has been taken to encourage staff for:
• ptimum utilization of resources
• preventing unnecessary wastage
• Increase bank’s profitability and share of stake holders
• Observation through data analysis:

93% of costs at branches is fixed cost 7% is variable (can be controlled through behavioral changes and

technical measures).

Reducing our own impact

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• Measures taken to reduce variable cost at JS Bank branches

Behavioral change measures

• Awareness: circulation of monthly expense dashboards to all branch managers.
• Accountability: circulation of detailed monthly decks to higher management about

branch and regional performance

• Competition: giving out monetary incentives to branch managers with the highest

cost reduction and appreciation shields to Regional Heads. Technical measures

• Solar panel installation
• Installation of inverter AC’s to new branches and in replacements
• AC’s to operate at 24C (fixed temperatures)
• Long backup UPS batteries to avoid running of heavy generators after office hours

for powering ATMs & IT room.

• SIM based monitoring of generator fuel to avoid fuel leakage(theft)
• Availing connectivity packages introduced by telcos for telephone cost saving.
• Using software to monitor printing jobs & papers sent by individual users across the

bank, also enforcing duplex printing to reduce paper usage.

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Reducing our own impact

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Performance measurement criteria:

• Branch performance is measured by comparing resource consumption of current period

vs same period last year. e.g

• Electricity

: units consumed

• Generator Fuel

: liters consumed

• Printing & Stationery : expense incurred
• Telephone

: expense incurred

• The units and liters saved are then converted into savings amount by multiplying it with

average cost of that period.

• Total Saving = Saving in Electricity+ Generator Fuel + Printing & Stationery + Telephone

Incentive mechanism

• BMs of top saving branches of 19 JS Bank regions (geographical ranking) are given

monetary incentives

• BMs of top saving branches category wise ( 4 categories based on size) are also

incentivized

• Shield of appreciation is also given to best performing Regional Head.
• All incentives are calculated and given out on quarterly bases.

Reducing our own impact

Future possibilities for climate finance

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Green Bonds

JS Bank in partnership with GiZ will be conducting a feasibility study on the issuance of green bonds in Pakistan. The study will focus on estimated bond market, possible sectors for investment, potential green projects, investment risk/barrier and their possible solutions etc.

Partnership with international agencies for clean energy

JS Bank is looking to partner with DFIs to further explore possibilities in clean energy financing

Clean and Green Pakistan

Prime Minister of Pakistan is focused on the Clean and Green Pakistan initiative. This involves tapping climate financing to undertake sustainable development projects that can help move Pakistan towards a more clean and sustainable future

Future possibilities for climate finance

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Net Metering

The facility of Net Metering is available for K-Electric Customers under Net Metering (NM) regulation by NEPRA: (Alternative and Renewable Energy) Distributed Generation and Net Metering Regulations, 2015. Eligible residential, commercial and industrial customers can avail net-metering facility to sell their excess electricity back to the power utility. The energy exported will be netted off against imported energy and billed according to the prevailing tariff. Banks can work with the customers and the utilities to procure rooftop solar PVs at subsidized rates to ensure affordable and reliable energy supply

Future possibilities for climate finance

Thank you