Key facts
- State-owned banks raised Rs 3,733.11 crore in green deposits in FY26, a significant increase from Rs 1,831.79 crore in FY25.
- The Reserve Bank of India's Green Deposit Framework, introduced in 2023, has been a key factor in this growth.
- State Bank of India deployed its green deposit funds primarily into clean transportation, specifically electric vehicles.
- Bank of Baroda channeled its green deposit proceeds into renewable energy and clean mobility sectors.
- Most state-owned banks utilized green deposit funds for renewable energy projects, solar initiatives, and clean transportation.
State-owned lenders in India experienced a significant increase in green deposit collections during the fiscal year 2026, driven by heightened depositor awareness and the implementation of the Reserve Bank of India's Green Deposit Framework from 2023. Analysis of annual reports revealed that eight public sector banks collectively raised Rs 3,733.11 crore in FY26, a substantial rise from Rs 1,831.79 crore in the preceding year.
This growth underscores a broader trend towards sustainable finance, with banks increasingly aligning their fundraising and lending practices with environmental responsibility. State Bank of India (SBI), the nation's largest lender, reported raising Rs 317.39 crore through its green deposit products by March 2026, with the entire amount deployed in clean transportation, particularly in its electric vehicle loan portfolio, which stood at Rs 3,587 crore as of March 31, 2026.
Bank of Baroda reported raising Rs 1,164.44 crore in FY26, an increase from Rs 1,083.09 crore in FY25, and channeled these funds entirely into renewable energy projects. The bank's green deposit portfolio reached Rs 1,899.12 crore by March 31, 2026. Similar to SBI and Bank of Baroda, other public sector banks predominantly directed their green deposit proceeds towards renewable energy initiatives, solar power projects, and clean transportation sectors, as detailed in their respective annual reports.
The RBI's Framework for Acceptance of Green Deposits, effective from June 1, 2023, provides a structured mechanism for banks to raise funds for eligible green activities, including renewable energy, clean transportation, sustainable water management, and climate adaptation.