The central bank has unveiled a framework for banks and NBFCs to accept deposits meant for investing in climate projects. Neither lenders nor depositors are interested.
The Reserve Bank of India is stepping up its push for climate finance. Last month, it unveiled guidelines for lenders to accept deposits exclusively meant for investing in “green” projects. There’s only one problem: Such deposits are simply not attractive enough for either banks or deposit holders.
To be fair, the new norms are primarily aimed at curbing greenwashing. The framework encourages banks and non-banking financial companies to accept green deposits from businesses. These are like regular fixed deposits, except that the funds can only be used for climate action projects.
Until now, the central bank had not defined what …
Azman writes on climate change, ESG, and how a warming world impacts businesses and people alike. Prior to The Morning Context, he led climate coverage at BloombergQuint, where he started his career as a desk writer.
Writer
azman@mailtmc.com
Mumbai