Framework for Green Deposits- Background, Highlights & Significance
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In April, RBI released the framework to regulate green deposit schemes of financial institutions. This move gains significance in view of the recent efforts by the central bank to boost the Indian financial institutions’ environmental and social responsibility.
What are green deposits?
- Green deposit is an interest-bearing instrument the proceeds of which are used for financing green projects. It is a type of fixed deposit received by banks.
- It can be used to finance projects like:
- Establishing a recycling facility
- Non-fossil fuel based transportation
- Renewable energy generation
- Biodiversity conservation
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