Green Finance: A New Norm for Banking Sector in India

Abstract

COVID 19 has brought about significant monetary and non- monetary changes in the economy with banking sector undergoing an unplanned structural and behavioral changes. The bank moratorium scheme, injection of funds in the economy, easing out monetary policy especially in the first half of its financial year has led to significant transformation in the financial and non-financial operations of the banking sector. A short-term disruption, prolonged loss of potential customers and high probability of default from SME’s and micro entrepreneurs are the challenges placed before the policymakers. But in the midst of COVID -19 the foreseeable opportunity is diversion of resources to green investments which in long run would accelerate the off sets of COVID 19. Green finance remained undermined in the Indian economy since long but banks can now play a catalytic role by bridging the wide gap in need and actual lending of green finance requirements in the country. The study attempts to portray the green finance landscape in the country along with role of banking sector in accelerating the recovery path. The study uses mixed methods of research to provide a comprehensive report along with concrete suggestions for policy makers..