Banks seek incentives for sustainability-linked loans from RBI and Centre

Banks are urging for incentives, such as relaxed norms on risk-weighted assets (RWA) and cash reserve ratio (CRR), for sustainability-linked loans. These loans tie interest rates to a company’s sustainability performance, promoting adherence to environmental, social, and governance (ESG) norms. Discussions with stakeholders, including the RBI, are ongoing, with proposals to include green financing in priority sectors like electric vehicles (EVs) and renewable energy.

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