Centre in talks with banks for a Green Finance Framework

In order to promote green lending, banks are in discussion with the government regarding a Green Finance Framework that would include a preferential exemption for key statutory requirements such as cash reserve ratio (CRR), statutory liquidity ratio (SLR), risk-weighted assets, and additional tax benefits. These concessions would reduce the sector’s capital cost for lending. Currently, the government is engaged with lenders but said talks are at a preliminary stage. A final decision would be made after consultations with all stakeholders, including the Reserve Bank of India.
In addition, banks propose updating the seven-digit Basic Statistical Return code to include green lending, allowing the government to monitor and promote green lending. They have also been lobbying the government to include loans for electric vehicles and green hydrogen under priority sector lending.