Public sector banks in India recorded a marked increase in green deposits in fiscal 2026, with Bank of Baroda raising ₹1,164.44 crore, and PSU lenders directing funds into clean transport and renewable energy projects.
DEPOSIT FLOWS AND BANK ACTIVITY
State Bank of India, the country’s largest lender, raised ₹189.08 crore through green deposits in FY26, taking its cumulative total to ₹317.39 crore by March 2026, and reported outstanding green deposits of ₹218 crore as of March 31, 2026. According to a PTI analysis of annual reports, eight state-owned lenders raised ₹3,733.11 crore through green deposits in FY26, against ₹1,831.79 crore a year earlier, and deployed the funds mainly in renewable energy and clean transport.
SBI deployed its entire FY26 amount in clean transportation, financing its Green Car (EV) Loan portfolio, which stood at ₹3,587 crore as of March 31, 2026. Bank of Baroda raised ₹1,164.44 crore in FY26, against ₹1,083.09 crore in FY25, deployed the entire funds in renewable energy and reported a green deposit portfolio of ₹1,899.12 crore as on March 31, 2026. Other state-owned lenders mostly deployed proceeds towards renewable energy projects, solar initiatives and clean transportation, according to their annual reports.
The RBI issued its Framework for Acceptance of Green Deposits on April 11, 2023, effective June 1, 2023. Under it, proceeds can be allocated to sectors including renewable energy, clean transportation, sustainable water management, climate adaptation and other eligible green projects.
MARKET CONTEXT
Analysts said the rise reflected a growing focus among banks and depositors on sustainable finance, with lenders increasingly linking their fundraising to environmentally responsible lending.
Sources: The Hindu Business Line Banking