On Tuesday, the Reserve Bank of India (RBI) announced complete rules for the acceptance of “green deposits” by banks and NBFCs. These deposits would allow the money to be utilized for financing activities such as renewable energy, green transportation, and green construction.
The issue of climate change has been recognized on a worldwide scale, and several initiatives have been launched to both cut emissions and advance sustainable practices.
When it comes to supporting initiatives and activities that are centered on the development of more environmentally friendly methods of energy production, the financial sector will play a significant role. The Reserve Bank of India (RBI) claimed that it has provided a framework for the acceptance of green deposits by regulated businesses since the process of the mobilization of resources and distribution of those resources to environmentally friendly initiatives is gaining pace in India.
Several of the organizations have already begun giving these deposits as a means of providing financial support for environmentally conscious activities and initiatives.
The implementation date for this structure is the 1st of June 2023.
According to the central bank, the goal of this framework is to “provide green deposits to customers, defend the interest of the depositors, assist customers to fulfill their sustainability agenda, resolve concerns about greenwashing, and help augment the flow of credit to green activities/projects.”
According to another statement made by the bank, “the distribution of revenues obtained from green deposits should be based on the official Indian green taxonomy.”
The boards of directors of banks and non-bank financial companies would be required to establish a complete policy on green deposits.
