BANKS
SBI launches green FDs to raise funds for climate-friendly projects
State Bank of India’s green rupee term deposits will have three maturity buckets; interest rates will be 10 basis points below the card rate for the respective tenures.
State Bank of India’s green rupee term deposits will have three maturity buckets; interest rates will be 10 basis points below the card rate for the respective tenures.
State Bank of India (SBI) has launched a green rupee fixed-deposit scheme to raise funds for financing environment-friendly projects.
The country’s largest bank will tap retail customers, family offices and entities that manage money for high net-worth individuals, for garnering green money.
These FDs will have three maturity buckets - 1,111 days, 1,777 days and 2,222 days.
They will be open to resident individuals, non-Individuals and non-resident Indian (NRI) customers.
As per the SBI website, these deposits will offer interest rates at 10 basis points below the card rate for retail and bulk deposits for the respective tenures.
Currently, the scheme is available through the branch network, and it will soon be made available through other digital channels such as YONO (you only need one) and internet banking services.
The state-owned lender strives to fulfil the ambitious goal of the Government of India of making “our nation” net carbon zero by 2070, fostering a greener and environmentally responsible financial future for all, SBI chairman Dinesh Khara said.
Senior citizens, staff, staff senior citizens are eligible for an additional interest rate over the applicable rate for the public. However, NRI senior citizens and NRI staff not eligible.
The depositors will be allowed to enjoy loan and overdraft facility against the deposit. Pre-mature withdrawal is also allowed.
The Reserve Bank of India (RBI) has issued a framework for green deposits raised by regulated entities (REs) on or after June 1, 2023. REs cannot finance green activities/projects first and raise green deposits thereafter. They have to disclose the amount of green deposits raised during the year and use of such funds in accordance with RBI norms.
REs can engage with any appropriate and reputed domestic/international agency for an external review of the financing framework.
The green deposits are covered by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
As of September 2023, SBI had a deposit base of over Rs 46.89 trillion with a CASA (current accounts savings accounts) ratio of 41.88%. The loan book stood at over Rs 34.11 trillion.
