MUMBAI: In keeping with its broad push towards sustainable financing, DBS Bank India aims to register 60% growth by next year end in its environmental social and governance (ESG) financing book for India clients from around S$1 billion as of October 2023.
“We will grow our renewable energy book by 60%. ESG is a very broad term. It’s social part under it as well, which includes PSL (priority sector loans),” Rajat Verma, head of institutional banking, DBS Bank India, said to ET. Verma added that DBS Bank’s push to increase ESG financing will largely factor into account environmental and governance needs. “Today, renewable energy, other than the very small renewable energy, does not come under PSL in any case. I’m excluding the social part which we do anyway as part of our obligation. This (aim) is over and above the social part,” he said. At close of trade on Tuesday, 1 Singapore dollar was equal to ?62.27, Reuters reported.
At a little above S$1 billion, DBS Bank’s ESG financing book for Indian clients in the ongoing calendar year is around 40% higher than last year’s size, Verma said.
Providing an insight into DBS Bank India’s renewable thrust into financing for the small and medium enterprises sector, Verma cited the need for suppliers to benefit from this type of financing. He also stressed on the focus areas for the lender.
“It’s called a collaborative finance tool. Essentially, the idea is to give benefits to the suppliers. We’ve got one programme that we’ve recently announced. The idea would be to have other programmes; you need to have other supply chains, with other corporates ultimately where a similar idea rolls out. There will be a benefit for the suppliers,” he said.
DBS Bank India is currently working with Indian Oil Corporation in Panipat to provide funding towards the utilisation of 50,000 tonnes of paddy straw, Verma said.
“We have a programme with the IOCL, where paddy residue is stored and then used to produce ethanol. They need to finance it; they need capital to finance and store that inventory, ultimately produce it, and then roll it back into fuel. This is a commercial activity that a lot of large companies are seriously looking at,” he said.
