The story so far: Last month, the Reserve Bank of India (RBI) came up with a regulatory framework for banks to accept green deposits from customers. Under the new framework, banks that accept green deposits will have to disclose more information on how they invest these deposits.
What are green deposits?
Green deposits are not very different from the regular deposits that banks accept from their customers. The only major difference is that banks promise to earmark the money that they receive as green deposits towards environment-friendly projects. For example, a bank may promise that green deposits will be used towards financing renewable energy projects that fight climate change. A green deposit is just one product in a wide array of other financial products such as green bonds that help investors put money into environmentally sustainable projects.
