“As the government’s debt manager, we are closely monitoring what is happening. If anything needs to be done, we will work with the government and take care of it,” the RBI governor said. | Photo credit: PTI

Reserve Bank of India (RBI) Governor Shaktikanta Das said on Saturday (August 10, 2024) that trading in green government bonds at the International Financial Services Centre in Gujarat could begin in the second half of the current financial year.

“We are in talks with the IFSC, it will be operational very soon. I think in the second half (of the current financial year), it will be possible,” Mr Das said.

In April, the RBI announced that it would create a framework for trading of green government bonds at Gujarat International Finance Tec-City (GIFT City). The government has been raising funds through green bonds since 2022-23 and has raised a total of Rs 36,000 crore in the last two years.

So far, the government has raised only Rs 1,697 crore of the agreed Rs 12,000 crore through green bonds in the current financial year, which was to be raised in the first half of the year ending September, as no favourable bids were received.

When asked about the muted response of investors to such bonds, Mr Das said, “As the government’s debt manager, we are closely monitoring what is happening. If something needs to be done, we will work with the government and take care of it.” He also mentioned that an important announcement in this year’s budget is the development of a climate taxonomy.

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“I think this will have a significant long-term impact on mobilising funds for the green sector, not just through green bonds, but also on overall financing of the green sector,” he said.

“We will develop a climate finance taxonomy to increase the availability of capital for climate change adaptation and mitigation. This will support the delivery of the country’s climate commitments and a green transition,” Finance Minister Nirmala Sitharaman said in her Budget speech for 2024-25.

Earlier, Sitharaman addressed the board members at the 609th central board meeting of the RBI here after the announcement of the budget.