New rules for green deposits from June 1: What are green deposits, how do they work; check details here

 

From June 1, banks and financial companies have adopted the new framework for green deposits issued by the Reserve Bank of India (RBI). Under the new framework, banks and NBFCs will now have to inform how and where they are investing the funds acquired from the green deposits.  

The RBI, in April this year, had floated the framework for the same and how will it apply to all scheduled commercial banks. The move has been adopted to enhance transparency and ensure that the money goes to its intended cause.  

As per the central bank’s notification, issued in April this year, banks that accept green deposits will have to apprise the central bank about the activities and companies they are investing the funds in. 

Read More: Petrol, Diesel Fresh Prices Announced Today: Check Fuel Rates In Your City on June 2

What is Green Deposit? 

In general terms, a green deposit is a fixed-term deposit for those who want to invest in environmentally friendly projects. Just like a regular FD scheme, the green deposit pays interest to its investors and has a fixed term. The proceeds that a bank gets from deposit holders get earmarked for allocation to green finance. 

Earlier, the RBI listed some sectors that can be classified as sustainable and thus eligible to receive green deposits, which included renewable energy, waste management, clean transportation, energy efficiency, and afforestation. 

“The financial sector can play a pivotal role in mobilising resources and their allocation thereof in green activities/projects. Green finance is also progressively gaining traction in India,” the RBI said.  

“The purpose and rationale for the framework are to encourage Regulated Entities (Res) to offer green deposits to customers, protect the interest of the depositors, aid customers to achieve their sustainability agenda, address greenwashing concerns and help augment the flow of credit to green activities/projects,” the central bank’s notification said.  

Read More: Explained: RBI’s new digital payment system to protect payments against digital attack, natural disasters

Top features of green deposits 

> Through green deposits, the bank can use the funds to extend loans for projects that support the United Nations Sustainable Development Goals.  

> Companies that have a vision for environment-friendly measures can have access to money that banks and lending institutions raise and earmark through green deposits. 

> Renewable energy, energy efficiency, clean transportation, climate change adaptation, sustainable water and waste management, and green buildings, are among the list of projects/activities where REs could allocate the proceeds raised through green deposits. 

> The registered entities shall issue green deposits as cumulative or non-cumulative deposits. 

Further, the RBI said the allocation of proceeds raised from green deposits should be based on the official Indian green taxonomy. 

> The projects, according to RBI, must encourage energy efficiency in resource utilisation, reduce carbon emissions and greenhouse gases, promote climate resilience and/or adaptation and value and improve natural ecosystems and biodiversity. 

> On maturity, the green deposits would be renewed or withdrawn at the option of the depositor. 

> RBI has also mentioned a list of ‘exclusions’ for REs. This includes projects involving new or existing extraction, production and distribution of fossil fuels; nuclear power generation; and direct waste incineration. 

Read More: What Are Forms 15G And 15H? How Senior Citizens Can Save Tax

Banks offering green deposit schemes  

A number of banks and financial institutions are already offering green deposit schemes, such as Federal Bank, IndusInd Bank, HSBC, Union Bank, DBS Bank, HDFC Bank. Citibank and HSBC globally offer green deposits. They price these deposits at a slightly lower rate (0.25-0.75 per cent). 

HDFC Limited’s Green and Sustainable Deposit is offering an interest rate of 7.2 per cent for a tenure of 61 to 120 months and 7.3 per cent per annum (annual income plan) for a tenure of 36 to 60 months. The interest rates are for deposits up to Rs 2 crore. For senior citizens, there is an additional rate of 0.25 per cent for all deposits up to Rs 2 crore.

(With agency inputs)

Source :
Msn

RELATED ITEMS:, , , , , 

Comments

Post a Comment

Popular posts from this blog

Senior Citizen Train Ticket Discount: Government has issued a new statement regarding giving discount to senior citizens on train tickets, know the details here

Image
  Senior Citizen Train Ticket Discount: Once again a demand has been made in the Lok Sabha to give discount to senior citizens on train tickets. Senior Citizen Train Ticket Discount:  Railways has withdrawn the discount given to senior citizens on train tickets since the Corona period. However, from time to time there has been a demand to restore this concession given to senior citizens in trains. Even in the winter session of the Lok Sabha, some members raised the demand for increasing fare concessions and facilities for senior citizens traveling in trains. However, even before this, Railway Minister Ashwini Vaishnav has told in the Lok Sabha that during the train journey, every passenger is given an average subsidy of 53 percent on the train ticket. Apart from this, he also told who gets discount on tickets while traveling by train. Demand for discount in train tickets raised again During Zero Hour in the House, Janata Dal (United) MP Kaushalendra Kumar said that before the Corona ep
Read more

Cash Transaction Rules: Income tax rules on cash transaction between Husband-Wife and Son-Father, know rules

Image
  Cash Transaction Rules: Income tax keeps an eye on our every transaction. But is there any tax on cash transactions or can Income Tax send a notice? Or how much cash transaction can take place between you and your wife or between father and son? If you also have these questions in your mind, then let us know their answers… If you also transact money between father and son or between husband and wife, then this news is useful for you. Actually, every transaction of ours has an eye on income. In such a situation, a question arises in the minds of many people whether income tax notice can be received even on cash transactions? Let us know how much cash transaction you can do in your family. Income tax sends notice? According to tax experts, if you give money every month for household expenses or give money as a gift, then the wife is not liable for income tax. Both these types of amounts will be considered as the income of the husband. The wife will not receive any notice from the Incom
Read more

Have a Current/Savings Bank Account? Know the Cash Deposit Limits under Income Tax Act to avoid Penalties and Notices

Image
  Adhering to cash deposit and withdrawal limits is crucial to remain compliant with the Income Tax Act in India. This article aims to elucidate the various facets of cash-related regulations, encompassing savings and current accounts, fixed deposits, credit card bill payments, real estate transactions, and more.  Cash Deposit Limits in Savings and Current Accounts The Indian Income Tax Act imposes specific regulations on significant cash deposits in savings accounts. Individuals accumulating INR 10 lakh or more during a fiscal year must notify tax authorities.  For current accounts, this threshold is set higher at INR 50 lakh. Although not immediately taxed, financial institutions report transactions exceeding these limits.  Cash Withdrawal and TDS under Section 194N  Section 194N outlines TDS rules for cash withdrawals. A 2% TDS is levied on withdrawals exceeding INR 1 crore within a fiscal year. Non-filers face a 2% TDS on withdrawals over INR 20 lakh and a 5% TDS on amounts exceedi
Read more