State-owned banks raised Rs 1,814 crore in green deposits during the financial year 2024-25, according to the annual reports of banks analysed by Moneycontrol, with the majority of these funds used by the renewal sector, and the remaining for clean transportation purposes.
The banks under study are Indian Overseas Bank, Indian Bank, Canara Bank, Bank of Maharashtra, Bank of India, UCO Bank, State Bank of India, Punjab National Bank, and Bank of Baroda.
Bank of Baroda raised higher funds through green deposits than its PSU peers, raising Rs 1,063.44 crore in FY25, followed by Punjab National Bank raising Rs 394.31 crore, Canara Bank raising Rs 134.71 crore, and State Bank of India raising Rs 105.92 crore in FY25.
In April 2023, the RBI had announced the framework for acceptance of ‘green deposits’ of regulated entities, in order to foster and develop a green financial ecosystem in India.
Under the framework, regulated entities can offer green deposits to customers, protect interest of the depositors, aid customers to achieve their sustainability agenda, address greenwashing concerns and help augment the flow of credit to green activities/projects, it said.
In June 2024, the then RBI deputy governor Michael Patra said the central bank is weighing a coverage for green deposits. “We are exploring appropriate coverage for green deposits, climate-risk based differential premiums and ex ante funding needs for climate sustainability,” Patra said at the 79th Executive Committee Meeting of the International Association of Deposit Insures (IADI) at Rome, Italy, on June 14.
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