IASSI-Quarterly

The world undoubtedly faces adverse consequences due to climate change in the near future, such as sea level rise, severe weather events, health risks, and other losses. However, the Indian government stated its aim to achieve net-zero emissions by 2070 in order to reduce carbon intensity. In order to meet this target, an investment of almost $10 trillion approximately needs to be made in total, out of which there is a deficit of about 3.5 trillion dollars. This investment is intended for the Indian government market of green bonds where they seek to raise $7.5 trillion dollars that it needs. Such forms of investment require soft loans, green bonds among other instruments as well. Programs in renewable energy and other environmentally friendly ventures have come up through Indian banks like SBI and NABARD. The other initiative launched by the Reserve Bank of India includes issuance green sovereign bonds. Green deposit Scheme is one of those schemes which have been launched. This represents India’s support towards green financing. Some of the challenges which are associated with green financing include high capital costs and lack of awareness. But focus on clean growth can be benefitted through green finance. This paper attempts to highlight several green financial instruments designed to mobilise funds and invest in sectors those have potential to address climate change challenges. State bank of India has been selected as a case study to capture how the Indian banking system is working towards financing green projects.