Builders may have to provide rooftop solar installations if they are to source loans for their housing projects from the State Bank of India (SBI) under the lender’s green funds.

The country's largest bank is looking to bundle and make home loans with rooftop solar installations mandatory for residential projects funded from the bank's long term climate action funds drawn down from multilateral agencies, a top SBI official said.

SBI, which has a home loan book of over Rs 6.3 lakh crore as of June, has outstanding forex loans of $2.3 billion from multilateral lenders, including the World Bank, the Asian Development Bank and KfW of Germany.

"We are planning to make it mandatory for builders to make rooftop solar installations if the project is funded from our green funds," Ashwini Kumar Tewari, Managing Director, Risk, Compliance and Stressed Assets at SBI, said.

"We are, in fact, planning to make it a bundled deal for home loan applicants going forward," Tewari told reporters here on the sidelines of the final day of the global SME summit organised by Sidbi.

These loans come with 10-year or 20-year tenors leading to forex risks for the borrowing banks.

Given the risks involved in long-term forex loans, Tewari urged multilateral lenders to allow borrowing banks to hedge their exposures so that green and financial inclusion funding can be more sustainable, news agency PTI reported.

Tewari also said the bank is increasing its exposure to green initiatives, including funding green buildings, battery recycling and solar rooftops plans.