According to reports, if your business goes green, you may soon get bank loans at concessional rates.
Banks, on their part, should set up green funds and have a chief green officer, according to guidelines on green banking framed by RBI’s arm, the Institute for Development and Research in Banking Technology (IDRBT).
The IDRBT has asked banks to extend concessional loans to companies/individuals who undertake environment-friendly projects.
Enquiries with some banks revealed they are in the process of examining the guidelines and might come up with specific policies soon.
According to K Ramakrishnan, Chief Executive, Indian Banks’ Association, many banks in India are keen to actively pursue green banking, though foreign banks are practicing this on a much more serious note since 1997.
The Reserve Bank of India had issued a circular in 2007 directing banks to adopt sustainable practices, but it is only now that green banking is gaining ground.
“Banks can contribute to ecological footprint directly and indirectly through investment in or lending to their customers’ enterprises,” B. Sambamurhty, Director, IDRBT, said. Banks should have designated chief green officers and boards should mandate specific policies, he added.
Facilitating paperless transactions, use of electronic means in customer-communication, motivating the workforce to follow green initiatives, regular energy audits and supporting projects ranging from community clean-ups to national-level initiatives on climate change are significant aspects of the new guidelines.
At the operational level, banks are told to keep a tab on the use of desktops which are never switched off and charging of laptops that consume a lot of energy. Banks have been told to set up green data centres as power and cooling systems consume up to 50 per cent of energy.
Green banking is an umbrella term referring to practices and guidelines to make banks sustainable in economic, environment and social dimensions.