Federal Bank to defund thermal projects by 2030
The bank’s green power sector exposure is Rs 5,083 crore across seven to eight projects, mostly solar and wind areas.
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MUMBAI: Federal Bank, the largest and the oldest private sector lender in Kerala, will completely stop funding for thermal power projects by 2030, according to a senior bank official.
As a first step towards its de-carbonisation initiative, the Kochi-headquartered bank will halve its exposure to the thermal power sector by 2025.
The bank’s green power sector exposure is Rs 5,083 crore across seven to eight projects, mostly solar and wind areas.
“We have internally set a target of completely stopping funding thermal power projects/traditional energy sector by 2030. As a first step towards achieving our decarbonisation efforts, we will be halving our exposure to this polluting sector by 2025,” Ashutosh Khajuria, the chief mentor at the bank, told PTI here.
Currently, the bank’s green loan book is Rs 5,083 crore and the sanctioned book of Rs 7,490 crore. “We see our green book crossing Rs 13,000 crore by 2025,” Khajuria, who retired recently as an executive director of the bank, said.
On the overall growth, he is confident of the bank continuing to clock 20 per cent credit disbursal growth this fiscal driven by home, business and gold loans.
The bank’s home loan and LAP (Loan Against Property) books are worth Rs 35,000 crore. Out of the total, around Rs 15,000 crore is LAP and the gold loan book is Rs 22,000 crore, which is more than 10 per cent of its Rs 1.96 lakh crore assets.
According to Khajuria, the fall in remittances in the first quarter was nothing but reflection of the exchange rate fluctuations.
