The International Financial Services Centres Authority (IFSCA) on September 27, 2023, issued a notification regarding FAQs on 'Guidance framework on Sustainable and Sustainability linked lending by Financial Institutions' (SL Framework) dated April 26, 2022.
The SF Framework is applicable to:
(i) IFSC Banking Units (IBUs)
(ii) Finance Company/ Unit registered with the IFSC and undertaking the permissible core activity of lending
The entities covered under the said framework are expected to develop a comprehensive board-approved policy on green4, social, sustainable, and sustainability-linked lending. Such a policy shall be aligned to any one of the principles specified in the guidelines.
Further, based on the above policy, the IBUs, and applicable FC/FUs are required to have at least five percent of their gross loans and advances directed towards either green or social or sustainable or sustainability-linked sectors/ facilities.
