Green lending: A route to improved loan quality in Indian banks

Vidya Mahadevan, Vikas Srivastava and Sowmya Subramaniam

Finance Research Letters, 2025, vol. 75, issue C

Abstract: This study investigates the relationship between noncarbon-intensive lending and the loan portfolio quality of Indian banks. We combine the sectoral emissions and each bank's sectoral lending data to assess the carbon exposure of bank loans and construct the noncarbon-intensive lending variable. The study reveals a significant non-linear relationship, highlighting the long-term strategic importance of noncarbon-intensive lending in improving loan portfolio quality.

Keywords: Noncarbon-intensive lending; Loan portfolio quality; Green lending; Nonperforming assets; Indian banks; Green taxonomy (search for similar items in EconPapers)
JEL-codes: G20 G21 G28 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325001552

DOI: 10.1016/j.frl.2025.106891

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