The urgency to address environmental challenges, such as climate change, resource depletion and biodiversity loss, has reached unprecedented levels in recent years. As a result, there has been a notable shift in the priorities and practices of banking institutions worldwide, with a growing recognition of the pivotal role they play in advancing environmental sustainability. This paradigm shift has catalysed a surge in green finance initiatives within banking institutions, reflecting a broader commitment to align financial activities with environmental objectives and promote sustainable development. This chapter provides a comprehensive overview of these initiatives, exploring their emergence, evolution and impact on sustainable development. It examines the motivations driving banks to adopt green finance practices. Furthermore, the chapter delves into the policies and principles that encourage green finance initiatives in banking (GFIB) institutions. It also discusses the challenges associated with implementing green finance initiatives in banking institutions. Finally, it offers insights into future trends and prospects for green finance in banking institutions.