PSU banks see sharp jump in green deposits FY26; deploy funds for clean transport, renewable energy

State-owned lenders witnessed a sharp surge in green deposit mobilisation in FY26 amid increased depositors’ awareness and the maturation of the Reserve Bank of India’s (RBI) Green Deposit Framework, introduced in 2023. According to PTI’s analysis of banks’ annual reports for 2025-26, eight state-owned lenders raised ₹3,733.11 crore in FY26 through green deposits, compared to ₹1,831.79 crore in the year-ago period.

The rise in green deposits reflects a growing focus among banks and depositors towards sustainable finance, with lenders increasingly linking their fundraising efforts with environmentally responsible lending, analysts said.

State Bank of India (SBI), the country’s largest lender, raised ₹317.39 crore through its green deposit products till March 2026, with outstanding green deposits recorded at ₹218 crore as on March 31, 2026.

SBI garnered ₹189.08 crore through green deposits in FY26, with the entire amount being deployed in clean transportation, particularly in green cars or electric vehicles, as per the bank’s annual report for 2025-26.

“The amount of green deposit raised has been utilised for financing the Green Car (EV) Loan portfolio,” SBI said in its annual report.

The bank said its green car loan portfolio stood at ₹3,587 crore as of March 31, 2026.

Green deposit proceeds have been channelled into this portfolio to align the bank’s liability mobilisation and asset deployment strategies.

Bank of Baroda raised ₹1,164.44 crore in FY26, compared to ₹1,083.09 crore in FY25. The bank deployed the entire funds in renewable energy.

The lender, meanwhile, reported a green deposit portfolio of ₹1,899.12 crore as on March 31, 2026, as per its annual report for FY26.

“The entire proceeds of the green deposit portfolio have been deployed into the renewable energy and clean mobility sector,” Bank of Baroda said in its annual report.

Other state-owned lenders too mostly deployed green deposit proceeds towards renewable energy projects, solar initiatives and clean transportation, according to disclosures made in their annual reports.

The RBI issued the Framework for Acceptance of Green Deposits on April 11, 2023, which came into effect from June 1, 2023. The framework provides a mechanism for banks to raise deposits and deploy the proceeds towards financing eligible green activities and projects.