{"id":1105,"date":"2023-04-14T00:00:00","date_gmt":"2023-04-14T00:00:00","guid":{"rendered":"https:\/\/www.nextias.com\/current_affairs\/uncategorized\/14-04-2023\/guidelines-for-acceptance-of-green-deposits\/"},"modified":"2023-04-14T00:00:00","modified_gmt":"2023-04-14T00:00:00","slug":"guidelines-for-acceptance-of-green-deposits","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/14-04-2023\/guidelines-for-acceptance-of-green-deposits","title":{"rendered":"Guidelines for Acceptance of Green Deposits"},"content":{"rendered":"<p><span style=\"font-size:13pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong><u>In News<\/u><\/strong><\/span><\/span><\/span><\/p>\n<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The Reserve Bank of India (RBI) announced the framework for accepting green deposits.<\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The framework will come into effect from June 1.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong><u>About\u00a0 Green Deposits<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">A green deposit means an interest-bearing deposit, received by the Registered Entities(RE )\u00a0 for a fixed period, the proceeds of which are earmarked for being allocated towards green finance.\u00a0<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The investment in this fixed tenure deposit will go towards financing eligible businesses and projects that <\/span><\/span><\/span><a href=\"https:\/\/www.nextias.com\/current-affairs\/21-11-2022\/indias-long-term-climate-action-strategy#:~:text=Thus%2C%20India's%20most%20updated%20NDC,below%202005%20levels%20by%202030.\" style=\"text-decoration:none\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#1155cc\"><u>promote the transition to a low-carbon, climate-resilient, <\/u><\/span><\/span><\/span><\/a><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">and sustainable economy.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong><u>Major Highlights of Recent Framework\u00a0<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong>Applicability: <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">It is <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong>applicable <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">to Scheduled Commercial Banks including Small Finance Banks excluding Regional Rural Banks, Local Area Banks, and Payments Banks, and all deposit-taking Non-Banking Financial Companies (NBFCs), including Housing Finance Companies.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">Registered Entities(RE ) will be allowed to issue green deposits on a cumulative or non-cumulative basis which could be renewed or withdrawn on maturity by the depositor.\u00a0<\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">All conditions applicable to other public deposits will also be applicable to green deposits.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong>\u00a0Allocation of fund<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The allocation of funds raised through green deposits by REs during a financial year shall be subject to an independent Third-Party Verification\/Assurance which shall be done on an annual basis.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">\u00a0The green deposits shall be denominated in Indian Rupees only.\u00a0<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong>Usage :\u00a0<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The proceeds from green deposits will be utilised for various activities like renewable energy, energy efficiency, and clean transportation among others.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong>Exclusion\u00a0<\/strong><\/span><\/span><\/span>\n<ul>\n<li style=\"list-style-type:circle\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">Some of the sectors which are <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong>excluded <\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">are nuclear power generation, direct waste incineration, alcohol, weapons, tobacco, gaming, palm oil industries, and hydropower plants larger than 25 MW, among others.<\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong><u>Aims and objectives<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The idea is to foster and develop a <\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong>green finance ecosystem<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"> in the country.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">It aims to<\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong> encourage regulated entities (REs<\/strong><\/span><\/span><\/span><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">) to offer green deposits to customers, protect the 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.\u00a0<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong><u>Present status\u00a0<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">Currently, various banks like Federal Bank, IndusInd Bank, and DBS Bank India accept green deposits.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:13pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\"><strong><u>Future Outlook\u00a0<\/u><\/strong><\/span><\/span><\/span><\/p>\n<ul>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">Climate change has been recognised as one of the most critical challenges and globally, various efforts have been taken to reduce emissions as well as promote sustainability.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The financial sector can play a pivotal role in mobilising resources and their allocation thereof in green activities\/projects. Green finance is also progressively gaining traction in India,<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The allocation of proceeds raised from green deposits should be based on the official Indian green taxonomy.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">The projects must encourage energy efficiency in resource utilisation and improve natural ecosystems and biodiversity.<\/span><\/span><\/span><\/li>\n<li style=\"list-style-type:disc\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">Banks and NBFCs will have to put in place a comprehensive board-approved policy on green deposits.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#000000\">Source:<\/span><\/span><\/span><a href=\"https:\/\/indianexpress.com\/article\/business\/banking-and-finance\/rbi-issues-framework-for-acceptance-of-green-deposits-by-banks-nbfcs-8551078\/\" style=\"text-decoration:none\" target=\"_blank\" rel=\"noopener\"><span style=\"font-size:12pt\"><span style=\"font-family:Arial\"><span style=\"color:#1155cc\"><u>IE<\/u><\/span><\/span><\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In News The Reserve Bank of India (RBI) announced the framework for accepting green deposits. The framework will come into effect from June 1. About\u00a0 Green Deposits A green deposit means an interest-bearing deposit, received by the Registered Entities(RE )\u00a0 for a fixed period, the proceeds of which are earmarked for being allocated towards green [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1106,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[54,26],"class_list":["post-1105","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","tag-biodiversity-and-environment","tag-gs-3"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2023\/07\/5107055Screenshot_6.png","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/1105","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=1105"}],"version-history":[{"count":0,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/1105\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/1106"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=1105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=1105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=1105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}