This paper aims to ascertain the benefits that Islamic and conventional banks inBangladesh can reap by implementing green banking, and also the drivers thatmotivate banks to behave environmentally. The Green Compliance Index (GCI) wasintroduced here to measure banks’ environmental behaviour. It was prepared basedon central bank guidelines. In this study, with the participation of all 40 privatecommercial banks (PCBs), 32 conventional banks and 8 Islami Shariah-based PCBs,firm specific variables were collected through content analysis of the GCI. Structuralequation modelling-partial least squares (SEM-PLS), together with the bootstrappingmethod, were used to evaluate the research data. These were collected and sortedfrom the FY annual report of 2018. For further support, a generalized linear model(GLM) was used to assess the outcomes. The results show that the effects of greencompliance on possible benefits are significantly higher for Islamic banks. In contrast,these banks comply less with the green banking codes than conventional banks do inBangladesh. Company size and the independence of bank directors appear to have asignificant influence on compliance with the green banking codes, while governancedoes not show such an association for either group of banks. As Islamic banks havea greater scope to attain benefits, policymakers should introduce more interactivegreen banking products and loan schemes for prospective consumers, especially inindustrial sectors where there is a greater possibility of being sustainable andenvironmentally friendly. Based on the findings, policy recommendations are madefor practitioners, regulators and future researchers.