Sovereign Green Bonds Trading at IFSC in Gujarat by Fiscal Year End: RBI Governor

RBI Governor Shaktikanta Das announced that trading of sovereign green bonds will commence at the International Financial Services Centre in Gujarat during the second half of the current fiscal year. The Indian government has been raising funds through green bonds since 2022-23. Finance Minister Nirmala Sitharaman has pledged to develop a climate finance taxonomy to enhance green sector funding.

RBI Governor Shaktikanta Das announced on Saturday that trading of sovereign green bonds is set to begin at the International Financial Services Centre in Gujarat during the second half of the current fiscal year.

'We are in discussion with the IFSC, it will be operationalized very soon. I think in the second half (of the current financial year), it will be possible,' Das confirmed.

The Reserve Bank of India revealed plans in April to issue a framework for enabling the trading of sovereign green bonds in GIFT City. The government has previously raised Rs 36,000 crore through green bonds since 2022-23 but has only secured Rs 1,697 crore out of a targeted Rs 12,000 crore in the first half of this fiscal year.

Das addressed concerns over the lukewarm investor response, remarking, '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.'

Additionally, Das highlighted the significant long-term impact of the climate finance taxonomy announced in this year's budget by Finance Minister Nirmala Sitharaman.

'We will develop a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation. This will support the achievement of the country's climate commitments and green transition,' Sitharaman stated.

In a related note, Sitharaman addressed the RBI Central Board in a post-budget meeting earlier in the day.

(With inputs from agencies.)