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Green Deposits Surge in India: Banks Mobilize Billions for Sustainability
16 Jun
Summary
- State-owned banks saw green deposit mobilization double in FY26.
- SBI deployed green deposits solely for electric vehicle financing.
- RBI's Green Deposit Framework enhanced sustainability finance efforts.
In fiscal year 2025-26, state-owned banks in India witnessed a substantial leap in green deposit collection, raising ₹3,733.11 crore. This represents a nearly twofold increase from the ₹1,831.79 crore mobilized in the prior fiscal year. This growth highlights an increasing commitment to sustainable finance from both banks and depositors.
Leading the trend, the State Bank of India (SBI) reported raising ₹189.08 crore in FY26, with all funds allocated to its Green Car (EV) Loan portfolio. As of March 31, 2026, SBI's green car loan portfolio stood at ₹3,587 crore, demonstrating a direct link between liability mobilization and eco-friendly asset deployment.
Bank of Baroda also saw robust growth, collecting ₹1,164.44 crore in FY26. The bank deployed these proceeds entirely into renewable energy and clean mobility sectors. Disclosures from other state lenders indicate similar deployments towards renewable energy, solar projects, and clean transportation initiatives.
The Reserve Bank of India's (RBI) Framework for Acceptance of Green Deposits, which became effective on June 1, 2023, has been instrumental. This framework enables banks to channel deposit funds into eligible green activities such as renewable energy, clean transportation, and sustainable water management.
