State Bank of India (SBI), country’s largest lender on Friday, January 12, launched the SBI Green Rupee Term Deposit (SGRTD). This is aimed at mobilising funds to support environment friendly initiatives and projects, thereby fostering the growth of a green finance ecosystem in India, SBI said.
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Who can apply?
This deposit scheme is open to resident individuals, non-individuals, and non-resident Indian (NRI) customers.
Tenure available
GRTD offers investors the flexibility to choose from three tenors: 1,111 days, 1777 days, and 2222 days.
How to apply?
Currently, the scheme is available through the branch network, and it will soon be made available through other digital channels such as YONO and Internet Banking Services (INB), the lender said.
Understanding green deposit
A green deposit is a fixed-term deposit for people looking to invest their surplus cash reserves in environmentally friendly projects.
By offering this product, lenders stride towards fulfilling the goal of the Government of India of making the nation net carbon zero by 2070.
A green fixed deposit operates similarly to regular term deposits, offering investors a fixed interest rate over a predetermined tenure. However, the key differentiator lies in the utilisation of the funds collected under green deposits.
Unlike traditional fixed deposits, green fixed deposits prioritise investments in projects with a positive impact on the environment.
The scope of projects funded by green fixed deposits is vast, ranging from financing solar power projects and wind farms to supporting organic farming and energy-efficient infrastructure.
Investment considerations
Despite the noble intentions behind green deposits, potential investors are advised to exercise caution.
Just like any investment, experts say that green fixed deposits come with a set of risks.
These risks may be associated with the specific projects funded, including regulatory changes or technological challenges. It is crucial for investors to carefully evaluate the terms, conditions, and interest rates before making an investment decision.
(Edited by : Amrita)
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