SBI to bundle loans with solar installations

The country’s largest lender SBI plans to bundle and make home loans with rooftop solar installations mandatory for residential projects funded from the bank’s long term climate action funds drawn down from multilateral agencies. The SBI, which has a home loan book of over Rs 6.3 lakh crore as of June, has outstanding forex loans of USD 2.3 billion from multilateral lenders, including the World Bank, the Asian Development Bank, and KfW of Germany.

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“We are planning to make it mandatory for builders to make rooftop solar installations if the project is funded from our green funds,” Ashwini Kumar Tewari, a Managing Director in charge of international banking, information technology and associates & subsidiaries at SBI, said.

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“We are, in fact, planning to make it a bundled deal for home loan applicants going forward,” Tewari told reporters here on Thursday on the sidelines of the final day of the global SME summit organised by Sidbi.

These loans come with 10-year or 20-year tenors leading to forex risks for the borrowing banks.

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Given the risks involved in long-term forex loans, Tewari urged multilateral lenders to allow borrowing banks to hedge their exposures so that green and financial inclusion funding can be more sustainable.

Tewari also said the bank is increasing its exposure to green initiatives, including funding green buildings, battery recycling, solar rooftops plans among others.

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