Managing Sustainability in Banking: Extent of Sustainable Banking Adaptations of Banking Sector in India

Abstract

The banking sector holds significant influence in promoting sustainability globally, including within emerging economies like India. India's banking landscape, comprising public sector, private, and cooperative banks, plays a vital role in the nation's economic advancement. With India being one of the world's fastest-growing economies, it faces the dual challenge of driving economic growth while addressing critical sustainability issues such as climate change, social disparities, and resource depletion. Given this context, the degree to which Indian banks have embraced sustainable practices emerges as a crucial topic, impacting various stakeholders from investors and regulators to civil society and the wider public. This study delves into the extent of adoption of sustainable banking practices by Indian banks, analyzing the factors driving this transition, the hurdles encountered, and the resultant outcomes. Through a thorough examination of industry trends, regulatory frameworks, and institutional efforts, the research aims to offer insights into the current state of sustainable banking in India. By assessing the integration of environmental, social, and governance (ESG) criteria into banking operations, the development of eco-friendly financial products, and the implementation of responsible lending strategies, the study seeks to evaluate how sustainable banking adaptations affect financial performance, risk management, and engagement with stakeholders. Additionally, the paper explores the influence of regulatory mandates, collaborative efforts within the industry, and activism from stakeholders in shaping the direction of sustainable banking in India. Drawing upon empirical evidence and exemplary practices, this research contributes to the ongoing discourse on sustainable finance, proposing recommendations to cultivate a more robust and inclusive banking sector in alignment with India's sustainable development objectives.