RBI Governor Says Trading Of Sovereign Green Bonds To Begin Soon In IFSC

Earlier in April, the RBI said that it would develop a framework to allow the trading of green bonds in GIFT City. The authorities have been raising funds via green bonds since 2022-23

The Reserve Bank of India’s Governor, Shaktikanta Das, on Saturday said sovereign green bonds trading will begin soon at the International Financial Services Centre in Gujarat. Das informed that the trading will commence in the second half of the current 2024-25 fiscal year (FY25).

According to a report by PTI, the Governor said, “We are in discussion with the IFSC, it will be operationalised very soon. I think in the second half (of the current financial year), it will be possible.”

Notably, earlier in April, the central bank announced that it would develop a framework to allow the trading of green bonds in GIFT City. The authorities have been raising funds via green bonds since 2022-23 and have collected Rs 36,000 crore overall in the last two years.

In the current fiscal year, Das noted that the government raised Rs 1,697 crore against the target of Rs 12,000 crore for the first half of the current year ending in September 2024. These funds were to be raised via green bonds, however, the official stated that it didn’t find any favourable bids.

Replying to the investors’ lack of interest in the issuance of these bonds, the Governor said, “As the debt manager of the government, we are watchful of what exactly is happening and if something needs to be done we will interact with the government and deal with it.”

Regarding the climate taxonomy, the official said that it is expected to have a major long-term impact on the ‘mobilisation of funds for the green sector, not only through green bonds, but also overall financing of the green sector’.

Das noted that the banking regulator will develop a taxonomy for climate finance to help boost the availability of credit for the purpose of climate adaptation and mitigation. This will further aid in achieving the country’s climate targets and facilitate the green transition of the economy. Notably, Finance Minister Nirmala Sitharaman stressed on a climate taxonomy in her speech during the presentation of Budget 2024-25 last month.