PSU Banks Mobilise ₹1,814 Crore in Green Deposits for FY25

In FY25, 9 public sector banks raised a total of ₹1,814 crore through green deposits, as per a Moneycontrol news report. These deposits were primarily used to fund renewable energy projects, while a smaller portion supported clean transportation.

Bank of Baroda Collected the Highest

Bank of Baroda raised the largest amount through green deposits, totalling ₹1,063.44 crore. Punjab National Bank followed with ₹394.31 crore. Canara Bank mobilised ₹134.71 crore, while State Bank of India raised ₹105.92 crore during the same period.

List of Participating Banks

The data covers the performance of 9 state-owned banks:

• Bank of Baroda
• Punjab National Bank
• Canara Bank
• State Bank of India
• Bank of India
• Indian Bank
• Indian Overseas Bank
• Bank of Maharashtra
• UCO Bank

Regulatory Framework Introduced in 2023

The Reserve Bank of India introduced a framework for green deposits in April 2023. This allowed regulated banks and financial entities to accept green deposits and route them toward environment-focused projects. The framework was to help depositors align funds with sustainability-linked activities while addressing concerns around greenwashing.

Other Updates

In June 2024, RBI Deputy Governor Michael Patra stated that the central bank was considering new measures related to green deposits. These included possible climate-risk-based differential premiums and other funding requirements. His remarks were made at the International Association of Deposit Insurers’ executive meeting in Rome.

Usage of Funds

According to the reports, most of the green deposits raised by these banks were directed to renewable energy projects. A smaller share went to initiatives focused on clean mobility.

Read more: Green Debt Securities: Understanding Green Bonds!

Conclusion

Public sector banks raised ₹1,814 crore in green deposits during FY25. A large portion of this was allocated to renewable projects. The regulatory structure supporting green deposits remains under review, with further updates expected as policies evolve.

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