BANKS ARE GOING slow on accepting green deposits. While one of the prime reasons for this is paucity of projects, experts say there is a lack of clarity over operational aspects of the Reserve Bank of India (RBI) guidelines.
A limited understanding of the risks involved in green finance has also kept banks on the sidelines.
"I think the first challenge (for green finance) is the asset itself because there are limited means of creating those assets," said Kotak Mahindra Bank deputy managing director Dipak Gupta. He added that one cannot create a risky asset which is green because you hope to get more deposits.While the latest framework cover a wide range of sectors, banks are largely sticking to renewables as they currently lack underwriting processes to lend to other sectors. In order to deepen green finance in India, experts feel that the banking industry must bring forth guidelines on how to underwrite for a wider range of projects.
This story is from the July 31, 2023 edition of Financial Express Mumbai.
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This story is from the July 31, 2023 edition of Financial Express Mumbai.
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