GREEN BANKING IN INDIA: A STEP TOWARDS SUSTAINABLE DEVELOPMENT

Abstract

The concept of green banking has emerged as a critical driver of sustainable development in India, particularly in the context of climate change and environmental degradation, which pose substantial threats to economic stability and resilience. The banking sector occupies a pivotal role in mobilizing financial resources toward environmentally sustainable projects and fostering resource-efficient operational practices. This study examines the evolution, instruments, and outcomes of green banking in India, with a specific focus on the regulatory impetus post-2010 and the subsequent engagement of both public and private sector banks. Utilizing secondary data from the Reserve Bank of India (RBI), the Indian Banks’ Association (IBA), and sustainability reports of leading financial institutions, the paper evaluates the adoption of green finance mechanisms such as green bonds, renewable energy project financing, and digital banking innovations. The findings indicate significant progress in mainstreaming sustainability within banking operations; however, persistent gaps remain in awareness, regulatory enforcement, and environmental risk assessment frameworks. Nevertheless, green banking holds considerable promise in advancing India’s Sustainable Development Goals (SDGs) and supporting the national commitment to achieve net-zero emissions by 2070. The paper concludes by offering policy recommendations to strengthen the country’s green finance architecture.