vcfo - Tumblr blog

[vcfo]

"GREEN DEPOSITS" Framework by RBI

"The greener the investments, the greener the economy" Greener Finance? Greener profits? What is all this fuss about?

From 1st June 2023, the acceptance of "green deposits" will come into effect. 

Purpose

Offering green deposits to customers

Protecting the Interest of Depositors

Helps Customers to achieve their sustainability goals

Mitigate Greenwashing Concerns

Encouraging the Flow of Credit to Green Activities/Projects

Key Highlights

Scheduled Commercial Banks and Small Finance Banks are eligible (excluding Regional Rural Banks, Local Area Banks, and Payments Banks)

Home Finance Companies and any deposit-taking Non-Banking Financial Companies (NBFCs) registered with the RBI (HFCs).

Renewable Energy, Energy Efficiency, Clean Transportation, Climate Change Adaptation, Sustainable Water and Waste Management, Green Buildings, and other sectors/projects are included in the distribution of revenues obtained from green deposits.

Banned projects include those involving new or current mining, production, and distribution of fossil fuels; nuclear power generation; direct waste incineration; landfill projects; hydropower facilities greater than 25 MW and so on.

Green deposits will be subject to a yearly independent Third-Party Verification/Assurance.

Must Note

Green deposits must be made in Indian rupees only.

Fun fact

Greenwashing is a phenomenon that promotes products/services as 100% green or environmentally friendly, but in reality, they do not adhere to the guidelines of green activities/projects.

[vcfo]

Indus Valley Annual Report by Blume

If we put a magnifying glass on Indus Valley Annual Report by Blume, India is grouped into India 1 Alpha, India 1, India 2, and India 3.

The intriguing data projects India 1 Alpha + India 1 consists of 110 M people with a contribution of $1tn to the Indian GDP. 

India 2, with 104M people, contributes 300bn of the Indian GDP.

India 3, with 1126M people, contributes $ 1.3tn of the Indian GDP. 

But the doomed part of the report, from what I analyzed, is 80% of India, or more than 1200M people (we can say India 3), earn less than 10,000 a month. 

As the data reflects the scenario of pre-covid India 2019,  you might imagine its repercussions in post-covid India. The lower strata took a massive hit on the Indian economy, and we can expect a downturn paradox in the salary of poorer people indirectly proportional to India's top earners.

Here we can apply the Matthew effect - as the adage goes, "the rich get richer, and the poorer get poorer." In short, the Matthew Effect says that poor citizens struggle to make ends meet while wealthy people gain opportunities plus advantages through initial popularity, wealth, and other avenues.

If we do not address the social and economic inequalities now, we will witness the extinction of India 3 and part of India 2 services, products, platforms, and vice versa.

[vcfo]

As an outsourced CFO, ViTWO provides a unique approach that ensures complete data security, 24x7 accessibility, and intelligent finance optimizations. ViTWO is the leading virtual CFO service provider based in India for over 6 years.

With our end-to-end automated financial management solution, a shared CFO experience enhances traditional accounting, compliance, fund management, and strategy-building services.

ViTWO envisions reshaping the vision of how businesses see financial management.

So, if you want to integrate the growth in finances of your business, book a FREE DIAGNOSTIC STUDY NOW!