Dinesh Kumar Khara, the Chairman of the State Bank of India (SBI), has predicted a significant increase in green bond issuance in India, with these bonds accounting for 8-10 per cent of the total corporate bond issuance in the years to come

In the upcoming years, green bonds would make up 8 to 10 percent of all corporate bond issuance in India, according to Dinesh Kumar Khara, Chairman of the State Bank of India (SBI).
Khara shared this while speaking on the fast changing environment of sustainable finance at the second FICCI ESG Summit, which was held on Monday.

In light of the net zero 2050 scenario, Khara stressed India’s increasing requirement for capital, placing it at 11 per cent of GDP, higher than the global average of 7.5 percent.

He noted that India will need an annual investment of roughly USD 110 billion to accomplish the 2030 targets. He emphasised the significance of utilising international capital resources, such as infrastructure funds, sovereign wealth funds, international pensions, and private equity.

Khara highlighted the evolving nature of the Indian green bond market by pointing out that even though the total value of green bonds issued since 2018 still only accounts for a small portion of all bond issuance, India routinely outperforms other advanced and emerging economies in this area. In FY 2024, he expects an increase in rupee-denominated green bond issuances by Indian firms.

To overcome obstacles in the green finance industry, Khara emphasised the importance of legislative initiatives, such as expanding the corporate bond market and encouraging uniform corporate reporting. Additionally, he emphasised SBI’s initiatives to include environmental, social, and governance (ESG) standards into its lending practices, highlighting the financial sector’s responsibility in promoting good change inside firms and a sustainable society.

The significant changes in sustainable finance following the approval of the Paris Agreement were described by K Rajaraman, chairman of the International Financial Services Centres Authority (IFSCA).

He spoke on policies like ESG debt listing, required sustainable lending by banks, and ESG fund disclosure regimes that are intended to develop a wide range of green and sustainable initiatives while managing financial risks associated to climate change and reducing greenwashing.