Climate change has been recognised as one of the most critical challenges faced by the global society and economy in the 21st century. The financial sector can play a pivotal role in mobilizing resources and their alloca
CS Professional · Banking - Law & Practice · PYQS · December 2024
Climate change has been recognised as one of the most critical challenges faced by the global society and economy in the 21st century. The financial sector can play a pivotal role in mobilizing resources and their allocation thereof in green activities/ projects. Green finance is also progressively gaining traction in India. In this regard, RBI has examined the aspects in detail and has released a broad framework in this regard. With this end in view, as all of us know, Deposits constitute a major source for mobilizing of funds by the Banks/Regulated Entities (REs). It is seen that some REs is already offering green deposits for financing green activities and projects. Taking this forward and with a view to fostering and developing green finance ecosystem in the country, Reserve Bank of India has put in place a Framework for acceptance of Green Deposits for the Regulated Entities. With this background, answer the following questions: What are the sectors of green activities/projects identified for allocation of proceeds under the guidelines in terms of the above framework/circular?
Answer & Explanation:
The green activities / projects identified in terms of the RBI circular are: Renewable Energy: Projects like wind, solar, hydropower, biomass, and geothermal energy. Energy Efficiency: Activities that promote reduced energy consumption or increased energy efficiency in buildings, industry, and appliances. Clean Transportation: Initiatives supporting public transportation, Electric Vehicles (EVs), or other low-carbon transportation solutions. Sustainable Water and Waste Management: Projects focusing on water efficiency, wastewater treatment, and waste-to-energy initiatives. Climate Change Adaptation: Measures enhancing resilience to climate-related risks. Sustainable Land Use and Forestry: Afforestation, reforestation, and sustainable agriculture. Terrestrial and Aquatic Biodiversity Conservation: Projects aimed at protecting natural ecosystems and endangered species. Pollution Prevention and Control: Projects aimed at reducing, controlling, or preventing pollution through initiatives like Waste management (e.g., recycling, composting), Air and water pollution control technologies, Sustainable waste disposal practices and Industrial process improvements to reduce emissions or waste. Green Buildings: Refers to buildings designed to reduce environmental impacts throughout their lifecycle, typically through Energy efficiency (e.g., efficient heating, cooling, and lighting systems), Use of sustainable building materials, Water efficiency and rainwater harvesting systems, and Certification under recognized green building standards.
Topics: Green Finance
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