Financing Green Projects Through Public Sector Banks In Western Maharashtra: Challenges And Opportunities

Abstract

Public sector banks (PSBs) play a pivotal role in financing green projects, hence contributing towards sustainable development and environmental protection in the Indian scenario. Now, in the case of Western Maharashtra, which is one of the prominent agricultural and industrial hubs of India, the demand for such eco-friendly projects related to renewable energy, waste management, and sustainable agriculture has seen significant growth. This paper aims to anlayze the role of PSBs in financing these green projects, challenges, opportunities, and future prospects. This asserts that the proper assessment of the financial viability of green projects provides a lack of awareness and technical know-how to PSBs. Two crucial barriers faced by the banks are regulatory barriers, the capital costs are high, and risk aversion shows a reluctance of the banks to open their funds for innovative yet uncertain green initiatives. With changes in environmental policies and greater government incentives, the scope for PSBs to grow into larger players in green financing through green bonds, low-interest loans, and public-private partnerships is becoming clearer. The study explores into the future course of green financing in the region, calling upon banks and policymakers to focus on capacity building, policy reforms, and integration of high technologies like blockchain and AI for better risk assessment. In this regard, PSBs have the capability to become drivers for the green economy, thus enabling the region to shift towards sustainable development. Using an exhaustive analysis of the financing landscape, this paper will provide insight into how the public sector banks in Western Maharashtra can convert challenges into opportunities and strengthen their role in green financing.