Reserve Bank Deputy Governor R Gandhi today said incorporating environmental concerns into commercial lending is a challenge in a country like India.
“The challenge before developing economies like ours is to mainstream green finances, so as to incorporate environmental impact into commercial lending, while simultaneously balancing the needs to economic growth and social development,” he said at a conference on sustainable finance here.
“We have to develop the instruments. We have to balance out the green development and economic development,” Gandhi said speaking to the reporters later.
The new priority sector lending requirements announced by the RBI include devoting money to social infrastructure and small renewable projects, which will help support the objective of sustainability finance, he said.
The central bank also has been working on various other aspects, he said, adding a working group has been formed to look into it.
Additionally, the Securities and Exchange Board of India (Sebi) has also worked out norms for raising money through green bonds, through which domestic financial institutions, like Exim Bank and Yes Bank have raised USD 1.1 billion in 2015, Gandhi added.