Green banking in India -Issues and practices

For past several years, economic institutions like banks have played a quiet significant role in development decisions. What has impelled them to start thinking green? There are numerous environmental organisations around the sphere which have put pressure on institutions that bankroll destructive projects. But recently banks have started to identify the factual costs of the consequences of disregarding environmentalists’ warnings. In a globalised economy, the industries and firms that previously establish nothing erroneous with financing millions of dollars for sectors like mining, illegal logging and other industrial operations that quickly deplete the ozone layer, deplete water resources, or contaminate the rivers, have now become very vigilant and careful. Along with institutions like civil society, and business organizations, banks and financial institutions realized that protecting the environment should also be their main business mainly because of severe law suits or consumer boycotts, credit and liability risk’. Environmental impacts are very important as it might affect the quality of assets and rate of return in the long run. This paper explores the importance of Green Banking in India, locating the international experiences and highlights imperative lessons for sustainable banking and development in India. However, we find that there has not been much initiative in this regard by the banks and other financial institutions in India though they play an active role in India's emerging economy. Some possible policy measures and suggestions are given to promote green banking in India.