What changed
The RBI introduced a dedicated set of directions for Small Finance Banks covering green deposits and climate‑risk management. The framework makes board‑level approval and public disclosure mandatory and adds requirements for third‑party verification and impact reporting.
What it means for you
Banks will need to formalise a green‑deposit policy, allocate the proceeds only to qualifying green projects, and embed climate risk checks into credit appraisal and overall risk management.
What you must do
- Draft and get board approval for a comprehensive green‑deposit policy and financing framework.
- Publish the green‑deposit policy on the bank’s website for public access.
- Set up a process for third‑party verification of green projects and conduct impact assessments.
- Integrate climate‑risk analysis into the existing risk management system.
- Prepare periodic reports and disclosures as prescribed by the RBI.
Who it affects
All Small Finance Banks, Board of Directors, Risk Management & Credit Teams, Depositors interested in green products
Do existing green‑deposit products need to be re‑structured?
Banks must align any current green‑deposit offerings with the new policy, including tenure, interest rates and earmarking of proceeds as per the RBI directions, if they intend to raise green deposits.
How often must banks report on green‑deposit usage?
Banks are required to submit periodic disclosures as outlined in the directions, but the specific frequency is not detailed in the provided source text.