Advancing Sustainability in Indian Banking: A Study of Initiatives and Sectoral Impact

DOI: 10.22161/ijeab.106.14

Abstract:
Environmental degradation and climate change have made sustainable finance a priority across nations. A strong and dynamic sustainable banking system is vital to integrate the climate related and societal challenges in the financial system for inclusive growth of the economy. The concept of sustainability in banking involves aligning financial services with environmental protection, social equity, and responsible governance. Research on sustainability issues within the banking industry has become an increasingly important field of inquiry. Scholars and practitioners are paying closer attention to how banks integrate environmental, social, and governance (ESG) principles into their operations, recognizing that financial institutions play a pivotal role in shaping sustainable economic transitions. By examining these issues, researchers provide valuable insights for policymakers and regulators to strengthen ESG adoption and align financial systems with long-term development and climate goals. The study observes that in recent years, the research and development in this field is more planned, intensive and deliberate. A few latest research papers and studies are mentioned in the literature review. These researches highlight the importance of financial decisions in promoting sustainability. The paper outlines the regulations, guidelines given by the Reserve Bank of India (RBI), mandates from the Securities and Exchange Board of India (SEBI) and the major instruments which are being used in the banking sector to develop a roadmap for the transition towards a sustainable economic and financial model. The study focuses on the initiatives taken by leading banks to promote the sustainability in the banking system of India. The paper identifies the different types of benefits of sustainable banking in banking operations in India. Despite significant progress, Indian banks continue to face structural and operational hurdles in embedding sustainability across governance, lending, and reporting frameworks. The issue of sustainable banking is in a transitional phase. There is a need to focus on the sustainability objectives by regulators, policymakers and financial institutions, to ensure the growth of a resilient and inclusive sustainable financial ecosystem in India.

Keywords:
Indian Banking, Sustainability, Social Equity, Regulators, Initiatives, Capital Markets, ESG.

Article Info:
Received: 16 Nov 2025; Received in revised form: 15 Dec 2025; Accepted: 20 Dec 2025; Available online: 28 Dec 2025

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