{"id":35402,"date":"2023-05-19T05:48:40","date_gmt":"2023-05-19T00:18:40","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=35402"},"modified":"2025-04-21T06:24:26","modified_gmt":"2025-04-21T00:54:26","slug":"green-deposit-what-are-rbi-regulations-on-green-deposit","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/green-deposit-what-are-rbi-regulations-on-green-deposit\/","title":{"rendered":"Green deposit: What are RBI regulations on green deposit?"},"content":{"rendered":"<h3><strong>What\u2019s in today\u2019s article?<\/strong><\/h3>\n<ul>\n<li><strong>Why in News?<\/strong><\/li>\n<li><strong>What are Green Deposits?<\/strong><\/li>\n<li><strong>The RBI\u2019s Regulatory Framework for Green Deposits<\/strong><\/li>\n<li><strong>Will Green Deposits help Depositors\/Investors and the Environment?<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Why in News?<\/strong><\/h2>\n<ul>\n<li>Recently, the Reserve Bank of India (RBI) came up with <strong>a regulatory framework for banks to accept green deposits<\/strong> from customers.<\/li>\n<li>Under the new framework, banks that accept green deposits will have to disclose more information on<strong> how they invest these deposits.<\/strong><\/li>\n<\/ul>\n<p><strong>\u00a0<\/strong><\/p>\n<h2><strong>What are Green Deposits?<\/strong><\/h2>\n<ul>\n<li><strong>Green deposits are not very different from the regular deposits<\/strong> that banks accept from their customers.<\/li>\n<li><strong>The only major difference<\/strong> is that banks promise to earmark the money that they receive as green deposits towards <strong>environment\u00ad-friendly projects.<\/strong><\/li>\n<li><strong>For example,<\/strong> a bank may promise that green deposits will be used towards financing renewable energy projects that fight climate change.<\/li>\n<li>A green deposit is just one product in a wide array of other financial products such as green bonds, green shares, etc., <strong>that help investors put money into environmentally sustainable projects<\/strong>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<figure class=\"media\">\n<div data-oembed-url=\"https:\/\/www.youtube.com\/watch?v=FQUROb-fyKQ\">\n<div><iframe src=\"https:\/\/www.youtube.com\/embed\/FQUROb-fyKQ\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<\/div>\n<\/figure>\n<p>&nbsp;<\/p>\n<h2><strong>The RBI\u2019s Regulatory Framework for Green Deposits:<\/strong><\/h2>\n<ul>\n<li>It lays down <strong>certain conditions that banks must fulfill<\/strong> to accept green deposits from customers.<\/li>\n<li>Firstly, banks will have to <strong>come up with a set of rules or policies <\/strong>approved by their respective Boards that need to be followed while investing green deposits from customers.\u00a0\n<ul>\n<li>These rules need to be made public on the banks\u2019 websites.<\/li>\n<\/ul>\n<\/li>\n<li>The banks will also have to<strong> disclose regular information<\/strong> about the\n<ul>\n<li>Amount of green deposits received,<\/li>\n<li>How these deposits were allocated towards various green projects, and<\/li>\n<li>The impact of such investments on the environment.<\/li>\n<\/ul>\n<\/li>\n<li><strong>A third \u00adparty will have to verify the claims<\/strong> made by banks regarding the projects in which the banks invest their green deposits.<\/li>\n<li><strong>The RBI has come up with a list of sectors<\/strong> that can be classified as sustainable and thus eligible to receive green deposits.\n<ul>\n<li><strong>These include<\/strong> renewable energy, waste management, clean transportation, energy efficiency, and afforestation.\u00a0<\/li>\n<\/ul>\n<\/li>\n<li>The new rules are aimed at <strong>preventing greenwashing<\/strong>, which refers to making misleading claims about the positive environmental impact of an activity.\n<ul>\n<li><strong>For example,<\/strong> a bank may advertise that their green deposits will have a huge positive impact on the environment, while the actual impact may be minimal.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><strong>Will Green Deposits help Depositors\/Investors and the Environment?<\/strong><\/h2>\n<ul>\n<li><strong>Depositors <\/strong>who care about the environment may get some satisfaction from investing their money in environmentally sustainable investment products.\n<ul>\n<li>However, there are challenges, <strong>since the bank is only able to invest in a certain number of projects with green funds<\/strong>..<\/li>\n<\/ul>\n<\/li>\n<li><strong>When it comes to protecting the environment<\/strong>, green investing enthusiasts believe that putting money into green projects may be one of the best ways to help the environment.\n<ul>\n<li>However, critics call green investing \u201c<strong>a feel-good scam<\/strong>\u201d that enriches only consultants.\u00a0<\/li>\n<li>In a complex world, it can be extremely hard to know if a project is really environmentally sustainable.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<hr \/>\n<h3><strong>Q1) What is Greenwashing?<\/strong><\/h3>\n<p>Greenwashing is the act of making false or misleading statements about the environmental benefits of a product or practice.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<h3><strong>Q2) What is Environmental, Social, Governance (ESG)?<\/strong><\/h3>\n<p>ESG refers to a collection of corporate performance evaluation criteria that assess the robustness of a company&#8217;s governance mechanisms and its ability to effectively manage its environmental and social impacts.<\/p>\n<p>&nbsp;<\/p>\n<hr \/>\n<p><strong>Source:\u00a0<\/strong><a href=\"https:\/\/epaper.thehindu.com\/reader\" target=\"_blank\" rel=\"nofollow noopener\"><u>What are RBI regulations on green deposit?<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Green deposits are the deposits that banks receive and promise to earmark towards environment\u00ad-friendly projects<\/p>\n","protected":false},"author":5,"featured_media":35403,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-35402","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/35402","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=35402"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/35402\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/35403"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=35402"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=35402"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=35402"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}