Sustainable Financing
One of the key elements of the Bank's ESG policy is its commitment to adopt responsible lending practices to foster a positive impact on the environment and society in order to meet the United Nations' Sustainable Development Goals (UNSDGs), and facilitate the country in meeting its Nationally Determined Contributions (NDCs) and the announcement of Net Zero emissions by 2070.
The Bank has in place a Framework for Sustainable Financing to provide guidance on green, social, sustainable, and sustainability-linked lending, outlining the methodology and associated procedures. The Bank has taken inputs from the Government of India’s Framework for Sovereign Green Bonds issued in December 2022, which is also been referenced in RBI’s guidelines on Framework for Acceptance of Green Deposits issued in April 2023.
The Bank classifies proposals into (i) dedicated sustainable lending; and (ii) sustainability-linked lending, based on the underlying characteristics of the transaction. The framework specifies the eligibility criteria, applicable due diligence requirements, and the verification process for sustainable finance. The Bank has been gradually integrating the characteristics of the framework into its enterprise-wide credit sanction and loan management systems.
At March 31, 2025, the outstanding sustainable financing portfolio, comprising both green and social financing, was ₹906.24 billion. Of this, green financing was ₹310.10 billion, representing approximately one-third of the total sustainable financing portfolio. The green financing portfolio comprises outstanding loans for renewable energy (RE) generation projects (such as solar, wind, hybrid, and waste-to-energy), both partially and fully funded supporting an installed capacity of ~1.83 GW.
From fiscal 2025, the Bank has expanded its tracking to include financing of RE associated activities, such as solar module manufacturers, wind turbine manufacturers, renewable energy EPC and O&M companies, which have included them in its disclosure. Other components of green financing portfolio include funding for electric vehicles (EVs) across both retail and corporate segments, commercial real estate projects certified as ‘green’ as per standards prescribed by IGBC (India Green Building Council) and LEED (Leadership in Energy and Environmental Design), and financing to companies involved in water supply, sanitation and wastewater treatment. On the social financing front, the Bank considers loans to weaker sections under RBI’s norms for Priority Sector Lending (PSL). These include exposures to small and marginal farmers, SHGs and others across sectors such as agriculture, education, housing and MSMEs.
Suppliers Code of Conduct & Green Procurement Framework
The Bank has put in place a Suppliers' Code of Conduct (Suppliers Code) to enhance the engagement between its Infrastructure Management and Services Group (IMSG) and its vendors/suppliers with respect to ESG and sustainability. The Suppliers Code is designed to encourage the adoption of sustainable practices among the vendors. These include practices related to efficient use of energy and water, as well as waste management. The Suppliers Code also encourages vendors to incorporate good practices, such as occupational health and safety, human rights and others, in their operations.
The Bank is focussed on creating awareness of these issues within IMSG and also on training the relevant team members. The Bank engaged with the vendors of IMSG during the fiscal to familiarise them with the Bank's approach to the adoption of sustainable practices and to communicate the Bank’s intent to evaluate them on environmental and social factors.
The Bank’s IMSG has also formulated a comprehensive Green Procurement Framework, underscoring its commitment to reducing its environmental footprint. The framework provides for the Bank's purchase of sustainable and environment-friendly products.
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