Image Source : PTI (FILE) SBI chairman Dinesh Khara
State Bank of India (SBI) chairman Dinesh Khara mentioned on Friday that the financial institution is presently in discussions with the Reserve Bank of India (RBI) relating to a possible discount within the money reserve ratio (CRR) requirement for inexperienced deposits.
SBI had launched a inexperienced deposit scheme final month, marking a major initiative within the home banking sector. The scheme goals to draw long-term retail deposits particularly designated to fund inexperienced transition tasks or climate-friendly initiatives.
Under the inexperienced deposit scheme, SBI gives rates of interest which are 10 foundation factors decrease than common deposit charges. Currently, the CRR stands at 4.5 per cent, requiring banks to keep up a sure portion of their deposits with the RBI as a solvency measure, with out incomes any curiosity on these reserves.
“We are engaging with the regulator for a reduction in the CRR for green deposits, and secondly, if at all as a policy, it can be incorporated into the regulator policy mechanism. Early beginning has happened from the regulator’s side also, but maybe it will take two to three years to start having an impact on the pricing too,” Khara mentioned at an occasion organised by the Indian Institute of Management Kozhikode.
Khara emphasised the significance of sensible and dependable scores for inexperienced financing, expressing considerations about potential greenwashing. He talked about that SBI is partaking with ranking businesses to discover the potential for establishing an accounting customary for inexperienced financing. Additionally, SBI has begun evaluating debtors primarily based on environmental, social, and governance (ESG) scores.
Regarding the historical past of negotiations between SBI and the RBI, Khara famous that his predecessor, Pradip Chaudhary, had beforehand sought curiosity funds from the RBI on deposits held beneath the CRR.
SBI’s inexperienced rupee fastened deposit scheme, launched final month, gives numerous tenors with rates of interest roughly 10 foundation factors decrease than the prevailing charges on common fastened deposits of comparable tenors. The RBI has carried out a framework for accepting fastened deposits since June 2023, requiring monetary establishments to prioritise elevating inexperienced deposits earlier than financing inexperienced tasks. The proceeds from inexperienced deposits may be invested in liquid devices with a maturity of as much as one yr.
Source: www.indiatvnews.com
