Banks are actively seeking regulatory support to accelerate climate finance through lower cash reserve ratio (CRR) on green deposits. According to The Economic Times, these discussions were part of the wider deliberations at the PSB Confluence held last month, where industry representatives emphasized the need for structural changes to boost green lending. The current CRR stands at 3%, and banks are proposing a reduction of up to 100 basis points (0.1%) to make green deposits more attractive to customers. As per industry estimates reported by The Economic Times, lenders raised about ₹4,000-5,000 crore in green deposits in 2025-26, though these deposits remain far below the critical mass required for substantial green lending growth.
A high-powered taskforce set up by the Confederation of Indian Industry (CII) has released comprehensive recommendations for establishing a dedicated green finance institution (GFI) to accelerate India's climate transition. According to reports from Rediff Moneynews, the taskforce was constituted to develop a roadmap for making Indian industries investment-ready, enhancing corporate sustainability performance, improving transparency, and promoting carbon markets. The latest CII India Sustainability Taskforce 2026 report has identified major obstacles currently hindering the country's progress on sustainable development. The report notes that inconsistent definitions of what qualifies as "sustainable" or "transition" activities are causing confusion among investors, while the quality of reported data requires further improvement as current disclosures are still evolving and subject to ongoing changes. The taskforce comprises senior representatives drawing from business, policy-making, and academic backgrounds to assist Indian enterprises on their sustainable development journey.
Jayant Sinha, Chairman of the CII India Sustainability Taskforce and former Union Minister of State for Finance and Civil Aviation, emphasized that India needs a comprehensive framework for sustainable investment decisions. Speaking to ANI on the sidelines of the CII-IIMA report launch, Sinha stated that "We need to be able to have a green taxonomy which will enable us to figure out where the investments have to go in." He highlighted the critical need for effective carbon markets that can establish a price for carbon and help accelerate investments in sustainable projects. The taskforce has identified that inconsistent definitions of what qualifies as "sustainable" or "transition" activities are causing confusion among investors, making a clear taxonomy essential for directing capital toward climate-aligned investments. Sinha emphasized that "We have to have carbon markets that enable a price for carbon and that can accelerate further investments," as reported by The Hindu BusinessLine.
The proposed green finance institution is projected to catalyse up to ₹1 trillion in investments over a 5 to 10-year period, as reported by Rediff Moneynews. According to Sinha, India is currently investing ₹100-125 billion across its entire energy system and may need to invest another ₹100-125 billion more to achieve its 2070 net-zero trajectory. The taskforce emphasizes that closing this financing gap requires blended finance instruments, which the proposed GFI can originate, syndicate, and scale up to address the funding requirements for net-zero initiatives. The latest recommendations include developing a reliable carbon market and establishing transparent funding routes through the Green Finance Institution (GFI) for qualifying climate and transition investments. A NITI Aayog report on 'Scenario towards Viksit Bharat & Net Zero - Financing Needs' estimates that India would need about $22.7 trillion in cumulative investment to achieve a successful transition covering both fossil and non-fossil sources.
The taskforce has called for expanding proportionate, decision-relevant sustainability disclosures and corporate transition strategies, according to the latest CII India Sustainability Taskforce 2026 report. The recommendations advise starting with larger, high-emission, trade-exposed organizations and widening the scope as reporting capabilities develop. Ajay Tyagi, Co-Chairman of the taskforce and former SEBI chairperson, emphasized that the SEBI Business Responsibility and Sustainability Reporting Framework (BRSR) needs to be sector-specific and extend beyond 1,000 listed companies. He stressed the importance of moving towards international standards such as the International Society of Sustainability Professionals (ISSP) or International Financial Reporting Standards (IFRS), noting that industries must understand that funding requirements for net-zero will not be met without adopting these standards. The taskforce has also proposed broader sustainability reporting standards, including their eventual extension to micro, small and medium enterprises.
Addressing concerns about trade-offs between sustainability and economic growth, Sinha rejected the idea of a trade-off between competitiveness and sustainability, between growth and sustainability. Speaking to ANI, he emphasized that "It is a fallacy to think that there is actually a trade-off between competitiveness and sustainability, between growth and sustainability. There is no trade-off." He argued that sustainable investment could instead support faster economic growth and job creation, stating "If you pursue sustainable investments, you will grow faster, you will create more jobs and you'll have a better greener future." Summing up the economic case for India's transition, Sinha said "Net zero is net positive for India. Competitiveness and sustainability go hand in hand." He stressed that the sustainability transition would require coordinated action across regulators and ministries, including the Securities and Exchange Board of India, Reserve Bank of India, Ministry of Finance, Ministry of Environment, Ministry of Industry and Ministry of Commerce. As reported by The Hindu BusinessLine, Sinha emphasized that "The sustainability transition would require coordinated action across regulators and ministries."
