A Review of Green Finance and Green Bonds Market in India

One of the most propounded elements of growth in the present era is that development should be sustainable. Development without taking into account its impact on the ecology is bound to be a self defeating process. Investors across the world are increasingly looking for avenues of investment that besides offering a reasonable rate of return, are also environment friendly. Green financing connects the objective of economic growth with environmental sustainability and is becoming increasingly relevant. It entails directing funds towards businesses investing in clean energy and environment oriented technologies, as well as, funding the use of non-conventional energy sources at micro level such as households and institutions. This brings to fore the important role played by banks and financial institutions in incorporating environmental considerations in granting loans and in devoting increased volume of funds to green investments. In this context, this paper explored how the issue of green financing has been approached in India and aimed at examining the trends in green bonds issuance by Indian banks and financial institutions.