Analysis of Green Financing Incentives in Indian Banking Sector from Banks' Viewpoint

Abstract

The phrase “green finance” has gained popularity in recent years. Business Week reported in 2007 that sustainable mutual fund investment had increased fifteen folds. Energy efficiency is becoming increasingly important in investment decisions. Throughout the 1980s and 1990s, investments were primarily focused on commercially viable ventures. However, we now live in a time when the emphasis is firmly on environmentally friendly initiatives. Many businesses are turning to green financing to ensure their long-term survival. As a result, several businesses have already begun to fund their operations with environmentally friendly resources. Corporations must now comply with the new green finance requirements and rules or risk falling behind. To ensure long-term sustainability, countries such as India should combine economic growth with environmental improvements.

Green finance is an innovative financial system. It refers to green agriculture, green marketing, green building, green banking, green energy, and eco-friendly projects. It is a significant aspect of green finance. Global warming and climate change are the most serious issues facing the world today, and they are beginning to have an impact. To address these issues, new financing models are required to validate existing business models and learn clean development mechanisms through the implementation of clean development mechanism (CDM) projects. Green finance contributes to the protection of common and green-ecological factors aimed at saving and conserving natural resources. Green baking practices help to conserve and produce natural resources. Green banking practices are environmentally sustainable banking practices that reduce the environmental impact of financial institutions while encouraging environmentally friendly behaviour. This article's purpose is to investigate green banking practices. This study also looks at how banks function and contribute to environmental sustainability. The manuscript attempts to study the objectives of green finance in relation to green banking practices in our country, to analyse green financial products, and to learn about the upcoming opportunities of green finance in terms of regulatory and policy frameworks for green banking. This article only used secondary data and focused on current and future renewable energy capacity for this manuscript, and it investigates ways to strengthen these frameworks to promote the growth of the green economy.