Post-pandemic shift towards sustainability in Indian banking regulations: Implications for agricultural and rural finance

Purpose: In the context of rapid technological advancement and escalating environmental concerns, sustainability has emerged as a critical necessity rather than a voluntary choice. In recent years, several global financial institutions have introduced sustainability-oriented policies. In line with Indias commitment to achieve net zero emissions by 2070, the Reserve Bank of India (RBI) introduced a series of sustainability-and climate-focused policy measures after that the COVID-19 pandemic. Against this background the present study examines the evolution of RBI’s post pandemic sustainability initiatives and analyses their reflection in their green lending performance of the National Bank of Agricultural and Rural Development (NABARD), with a specific focus on rural and agricultural finances. Methodology: The study adopts a descriptive and analytical research design based on secondary collected from RBI and NABARD annual reports, policy documents, and official publication for the period 2022-2024. Trend analysis, percentage analysis, descriptive statistics, and a composite index constructed using minimum-maximum normalisation are employed to examine patterns in green lending without establishing causal relationships. Findings: The findings indicate that NABARD’s green lending amount remained stable during 2022 2023 and increased in 2024 while the number of green projects finance remained unchanged. This suggests a rise in financing intensity per project rather than an expansion in project coverage. However, the share of green lending in NABARD’s total lending portfolio showed a marginal decline over the study period, indicating that green finance continues to constitute a relatively small component of overall rural and agricultural credit. The composite index reflects a consistent improvement in green lending performance, reaching its highest level in 2024. Significance: The study highlights the gradual alignment between RBI’s Sustainability-oriented regulatory framework and NABARD’s green financing practices in the post pandemic period. The findings provide policy relevant insights for strengthening the integration of sustainability objectives within mainstream rural and agricultural finance in India.