The Reserve Bank of India (RBI) on April 11, 2023, issued a circular regarding the Framework for the acceptance of Green Deposits
The framework shall come into effect from June 01, 2023
The following has been stated namely: -
• This Framework aims to encourage regulated entities (REs) to offer green deposits to customers, protect the interest of the depositors, aid customers in achieving their sustainability agenda, address greenwashing concerns, and help augment the flow of credit to green activities/projects.
• It states that this framework shall be applicable to the following entities namely: -
(i) Scheduled Commercial Banks including Small Finance Banks (excluding Regional Rural Banks, Local Area Banks, and Payments Banks)
(ii) All Deposit-taking Non-Banking Financial Companies (NBFCs) registered with the Reserve Bank of India under clause (5) of Section 45IA of The Reserve Bank of India Act, 1934, including Housing Finance Companies (HFCs) registered under Section 29A of The National Housing Bank Act, 1987
• It states that the REs shall put in place a comprehensive Board-approved policy on green deposits laying down all aspects in detail for the issuance and allocation of green deposits further a copy of the stated policy on ‘Green Deposits’ shall be made available on the website of the RE
• It states that the review report shall be placed by the RE before its Board of Directors within three months of the end of the financial year which shall, inter-alia, cover the following details namely: -
(i) amount raised under green deposits during the previous financial year
(ii) list of green activities/projects to which proceeds have been allocated, along with a brief description of the projects
(iii)the amounts allocated to the eligible green activities/projects
(iv) a copy of the Third-Party Verification/Assurance Report and the Impact Assessment Report
• The Framework for acceptance of Green Deposits has been enclosed.
[Circular No. RBI/2023-24/14DOR.SFG.REC.10/30.01.021/2023-24]
