Green Deposit Schemes in India
Green Deposit Schemes in India
Evolution and Timeline of Green Deposits in India 2
2021 – Pioneering Steps by Private Banks 2
● Yes Bank launched India’s first Green Fixed Deposit in 2021. 2
June 2023 – RBI’s Regulatory Framework 3
July 2023 – SBI’s Entry with SGRTD 3
2023–2025 – Wider Adoption Across the Sector 3
Green Deposits Right for You? 5
Introduction
In recent years, environmental sustainability has become a central focus of financial institutions worldwide, and India is no exception. Among the most innovative instruments driving this green transformation are Green Deposit Schemes—a form of fixed deposit wherein the proceeds are earmarked exclusively for environmentally sustainable projects. These include investments in renewable energy, pollution control, sustainable water use, clean transportation, green buildings, and more.
The first notable step in this direction in India was taken by Yes Bank, which launched India’s first Green Fixed Deposit in 2021, targeting both retail and institutional investors. Shortly after, IndusInd Bank followed with a similar initiative. Recognizing the growing interest and need for regulation, the Reserve Bank of India (RBI) issued a comprehensive framework in June 2023, standardizing how banks and NBFCs should mobilize and report green deposits.
Following this regulatory push, several public and private banks—including State Bank of India (SBI)—have introduced their own green deposit products. SBI’s Green Rupee Term Deposit (SGRTD), launched in July 2023, is one such offering that allows customers to contribute directly to India’s green growth while earning assured returns.
Evolution and Timeline of Green Deposits in India
India’s journey into green deposits began as part of a broader global shift toward sustainable finance. While climate bonds and ESG-linked loans had already made inroads into corporate and institutional financing, green deposits for the general public marked a turning point in aligning retail finance with environmental goals.
Below is a timeline that maps the major milestones in the evolution of green fixed deposits in India:
2021 – Pioneering Steps by Private Banks
Yes Bank launched India’s first Green Fixed Deposit in 2021.
The deposit allowed both retail and corporate investors to contribute to projects aligned with environmental, social, and governance (ESG) standards.
The proceeds were directed towards sectors such as clean energy, sustainable housing, and water resource management.
IndusInd Bank followed with its Green Fixed Deposit in December 2021.
This product was explicitly aligned with the United Nations Sustainable Development Goals (UN SDGs) and financed renewable energy, waste management, and climate adaptation initiatives.
June 2023 – RBI’s Regulatory Framework
Recognizing the growing interest in sustainable finance, the Reserve Bank of India (RBI) issued the “Framework for Acceptance of Green Deposits” on 1st June 2023.
This landmark guideline laid down uniform principles for banks and Non-Banking Financial Companies (NBFCs) to accept green deposits.
It mandated:
Clear disclosure of end-use of funds.
Annual third-party impact assessment.
A Green Finance Taxonomy for eligible projects.
Regular reporting in alignment with climate and ESG goals.
The framework became effective from 1st June 2023, ushering in a new era of standardized, transparent green deposit instruments.
July 2023 – SBI’s Entry with SGRTD
State Bank of India (SBI), India’s largest public sector bank, introduced the SBI Green Rupee Term Deposit (SGRTD) in July 2023.
It was one of the first public sector green deposit schemes launched under RBI’s framework.
SGRTD offered special tenors like 1,111, 1,777, and 2,222 days, with proceeds directed toward green projects including solar power, sustainable agriculture, and water conservation.
2023–2025 – Wider Adoption Across the Sector
Following SBI’s lead, several other banks introduced green deposit products:
Central Bank of India: Cent Green Time Deposit (1,111 / 2,222 / 3,333 days)
Indian Bank: IND Green FD (555-day tenor)
Canara Bank, Bank of India, HSBC India, Federal Bank, Yes Bank, and AU Small Finance Bank also introduced or expanded their green FD offerings.
Many of these products catered to both retail and senior citizen investors, offering competitive interest rates while funding certified green projects.
Today: A Growing Ecosystem
As of 2025, India’s green deposit ecosystem has grown steadily, with:
Multiple public and private sector banks actively offering green deposit schemes.
Increased investor awareness about sustainable finance.
Integration with digital platforms like mobile banking and YONO (SBI) to widen retail participation.
Green deposits emerging as a tool for climate-conscious saving, giving depositors a chance to align personal finance with environmental impact.
Comparing Key Features
Green Deposits Right for You?
Ideal if you want to support green finance while earning fixed returns.
If you can lock in your funds for ~3 to ~6 years and qualify as retail or senior, you could get 6–6.7% p.a..
Good flexibility with premature withdrawal and loan against deposit, similar to regular FDs—but without higher tenors or conversion options.
Summary
Quite a few banks now offer green term deposits—both public sector (Central Bank of India, Indian Bank, Bank of India, Canara Bank, Bank of Baroda) and private/foreign (HDFC, IndusInd, HSBC, DBS, Federal, AU, Yes Bank, Can Fin Homes). They typically feature specialized tenors (e.g., 555, 999, 1,111, etc.) and interest rates competitive with regular FDs (often slightly higher, with extra senior rates) (financialexpress.com, reddit.com, indianbank.in, bankofindia.co.in, centralbankofindia.co.in).
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