India green finance ecosystem has grown rapidly, with RBI green deposit guidelines, SEBI green bond framework, and increasing ESG-linked lending. This guide covers the regulatory landscape and opportunities.
RBI Green Deposit Framework
RBI issued the Framework for Acceptance of Green Deposits in April 2023, applicable to all scheduled commercial banks and deposit-taking NBFCs. Key requirements:
- Board-approved green finance policy
- Green deposits must be allocated to eligible green activities
- Third-party verification of green deposit allocation
- Annual disclosure on green deposit utilisation
SEBI Green Bond Framework
SEBI regulates green bonds issued by Indian listed entities. Green bonds must finance projects in renewable energy, clean transportation, sustainable water management, pollution prevention, and similar categories.
ESG-Linked Lending
Banks increasingly offer preferential terms for ESG-compliant borrowers, including:
- Lower interest rates for green projects
- Sustainability-linked loans with ESG KPI covenants
- Green credit lines for renewable energy and energy efficiency
Assess your green finance eligibility with our GreenFinance Screener or learn about our Green Finance Advisory services.