LI Network
Published on: November 10, 2023 at 15:37 IST
The Reserve Bank of India (RBI) has issued a notification, signaling a significant policy shift. The central bank has granted Non-Resident Indians (NRIs) the opportunity to invest in the Government’s Sovereign Green Bonds for the fiscal year 2023-24. This move comes as part of the government’s initiative to promote environmentally sustainable investments.
The circular issued by the RBI explicitly states, “It has now been decided to designate all Sovereign Green Bonds issued by the government in the fiscal year 2023-24 as ‘specified securities’ under the fully accessible route (FAR).” This designation eliminates any previous restrictions on NRIs regarding investments in these bonds.
Effective immediately, the directions outlined in the notification aim to facilitate seamless investment by NRIs in Sovereign Green Bonds. This decision aligns with the broader strategy to encourage green financing and attract a diverse range of investors to participate in the country’s sustainable development goals.
The government has ambitious plans to mobilize funds through green bonds, targeting a borrowing of Rs 20,000 crore in the ongoing financial year.
Green bonds, a financial instrument gaining global traction, are dedicated to funding projects with a positive impact on the environment and climate. Such projects typically include initiatives related to renewable energy, clean transportation, and eco-friendly infrastructure like green buildings.
This move by the RBI reflects a proactive stance toward engaging NRIs in supporting the nation’s green agenda. It not only expands the investor base for green bonds but also underscores the commitment to fostering environmentally responsible investments.
As India strives for a more sustainable and eco-conscious future, initiatives like these play a crucial role in attracting capital for projects that contribute to environmental well-being.