The Reserve Bank of India published detailed guidelines on Tuesday for banks and NBFCs to follow when accepting green deposits that could be used to finance projects like green building, green transportation, and renewable energy. Various initiatives have been made worldwide to reduce emissions and promote sustainability in response to climate change, which has been acknowledged as one of the greatest challenges. The financial sector can be crucial in mobilizing resources and allocating them to green projects and activities. In releasing the guidelines for regulated entities to accept green deposits, RBI noted that green finance is also steadily gaining ground in India.
Green deposits are already being offered by some regulated entities (REs) to finance green initiatives and projects. On June 1st, 2023, the framework will go into effect. The list of initiatives/projects where REs could allocate the funds raised through green deposits includes renewable energy, energy efficiency, clean transportation, climate change adaptation, sustainable water and waste management, and green buildings.
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