Bumpy ride ahead for green deposits with questions raised about workability

The RBI's framework for green deposits is well meant but raises many questions on its workability

Raghu Mohan New Delhi
Green bonds

The RBI is of the view that if REs are unable to quantify the impact of their lending/investment, they should disclose, at the minimum, the reasons

The Reserve Bank of India (RBI) has switched on the ignition for the long and bumpy ride towards raising resources for addressing climate risks with its framework for green deposits last week. Though no different from the current interest-bearing deposits of its regulated entities (REs), proceeds have to be deployed in green projects. More clarity will flow through when the official Indian taxonomy for this is firmed up, but the central bank has for the interim drawn up a list of activities qualifying as “green” — those that boost energy efficiency and climate resilience; and cut carbon emissions and greenhouse gases.
Mint Road’s move builds on the Union Budget FY23’s significant focus on green; and the country’s stated goal of achieving net-zero carbon emissions by 2070. A start has been on the liabilities side of the RBI’s REs with the green-deposit framework. But just how do you get people to park funds in these offe

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First Published: Apr 19 2023 | 6:04 PM IST

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