# What Can Banks in India Finance With Green Deposits?

Canonical: https://senseible.earth/climate-intelligence/rbi-green-deposits-what-banks-finance

Published 2026-10-13.

Walk into many Indian banks today and you can open a green fixed deposit. The money is supposed to go to green projects. For a business owner looking for finance, that raises a useful question: if banks are collecting green money, what kinds of loans is it meant for, and how do you get one?

This article explains the Reserve Bank of India's green deposit rules from the borrower's side.

## The rules in brief

The RBI issued its **Framework for Acceptance of Green Deposits** on 11 April 2023, effective 1 June 2023. It applies to scheduled commercial banks, including small finance banks, and to deposit-taking NBFCs, including housing finance companies. Regional rural banks, local area banks and payments banks are excluded.

A green deposit is an ordinary interest-bearing deposit for a fixed period, with one difference: the money raised must be allocated to green finance, meaning activities and projects that contribute to climate mitigation and other environmental objectives.

## What each bank must publish

Each bank or NBFC taking green deposits must have a board-approved financing framework, published on its website. It has to set out:

- **Eligible green activities** the deposits can fund. Eligibility is to follow India's official green taxonomy once it is notified.
- **How projects are evaluated and selected.**
- **How the borrower's sustainability information is monitored and validated.**
- **How proceeds are allocated and reported,** including third-party verification.

That last point is why green deposit money comes with paperwork. The bank must be able to show, to a verifier and to its depositors, that the money went where it said.

## What this means for a borrower

1. **Read your bank's framework.** It is public. It tells you which activities qualify, such as renewable energy, energy efficiency, clean transport, green buildings or pollution control, and what evidence the bank will ask for.
2. **Expect monitoring after the loan.** Because the bank reports on allocation and impact, it will ask for data during the loan, not just at sanction: energy generated or saved, emissions avoided, project completion.
3. **Bring documented data.** A borrower who can show monthly energy use and emissions from bills and invoices, before and after the project, is easier for the bank to allocate green money to.

Green deposits are a source of funds for the bank, not a separate loan product with fixed concessional rates. Whether you get a better price depends on the bank's own green lending policy.

Senseible keeps a borrower's energy and emissions as a monthly record linked to each bill and invoice, which is the kind of evidence a bank needs for allocation and impact reporting. For the loan process itself, read [how to get a green loan in India](https://senseible.earth/climate-intelligence/how-to-get-green-loans-india-carbon-data), and for common pitfalls, [why green loans get rejected](https://senseible.earth/climate-intelligence/green-loan-rejection-reasons-and-how-to-fix-them).

This is general guidance. Check your bank's published green financing framework for its eligible activities and terms.

## Related guides

- [the Pakistan green taxonomy](https://senseible.earth/climate-intelligence/pakistan-green-taxonomy)
- [solar loan for an MSME in India](https://senseible.earth/climate-intelligence/solar-loan-for-msme-india)
- [how to get a green loan in India](https://senseible.earth/climate-intelligence/how-to-get-green-loans-india-carbon-data)
- [green loan for a textile business in Karachi](https://senseible.earth/climate-intelligence/green-loan-textile-business-karachi)
- [financed emissions for banks in India](https://senseible.earth/climate-intelligence/financed-emissions-banks-india)