It is not mandatory but in case REs intend to raise green deposits from their customers they should follow the framework prescribed therein.
The extant guidelines do not permit REs to offer differential rate of interest on green deposits.
The REs shall pay interest on green deposits to their customers as per agreed terms and conditions and aforesaid directions irrespective of allocation/utilisation of proceeds.
There is no restriction on premature withdrawal of green deposits.
However, the REs, shall adhere to the extant guidelines.
The liquid instruments are level 1 high quality liquid assets, as per the extant guidelines.
The REs can temporarily park proceeds of green deposits, pending allocation towards green activities/ projects, in liquid instruments with maximum maturity up to one year (This will have to be specified under the financing framework).
The framework does not envisage any penalty for non-allocation of proceeds towards green activities/ projects; however, it shall be subject to supervisory review.
The framework is applicable for green deposits raised by REs on or after June 1, 2023.
REs cannot finance green activities/projects first and raise green deposits thereafter.
Banks are allowed to offer overdraft facility to customers against green deposits subject to the instructions contained in the consolidated circular on opening of current accounts and CC/OD accounts by banks dated April 19, 2022, as amended from time to time.
The deposits raised under the framework are covered by DICGC in accordance with the Deposit Insurance and Credit Guarantee Corporation Act, 1961 and the regulations framed thereunder, as amended from time to time.
Foreign banks can have a common global policy on green deposits, without prejudice to the provisions of the framework for green deposits raised in India after June 1, 2023.
No.
The current framework permits green deposits to be denominated in Indian rupees only.