Cogencis, Thursday, Apr 27
[C] Sources say SBI may issue green bonds FY18, hires KPMG as consultant
By T. Bijoy Idicheriah
MUMBAI - With an aim to issue green bonds possibly in 2017-18 (Apr-Mar), State Bank of India has hired KPMG as a consultant to enable the lender to comply with norms under Climate Bond Standards of the Climate Bond Initiative before as well as after the issuance of bonds, two senior bank sources told Cogencis.
The bank did not respond to a specific query on KPMG being roped in as a consultant for the proposed green bond issuance.
"KPMG will be enable SBI to come up with green bond issues that are in sync with global requirements," a senior SBI official said. "They will help with assessing that SBI chooses projects that are eligible to receive funds under climate change norms, and provide support during the pre-issuance phase through its reports."
A second SBI official said that KPMG would also help with the global requirement that the bond remains in sync with climate change norms, by providing finance to good-quality projects under eligible sectors and concurrent monitoring of their progress.
In March, State Bank of India's board approved issuance of foreign currency notes worth up to $1.5 bln in 2017-18.
Climate change has emerged as a global phenomenon and recent discussions have also studied incentivising financing of projects that minimise or limit emission of harmful greenhouse gases.
Additionally, there is a move to impose higher provision and capital requirements for financing of polluting industries which will prove to be an additional burden on banks' balance sheets.
In a speech at SBI's Economics Conclave on Sep 28, Reserve Bank of India Deputy Governor S.S. Mundra had said that global discussions were veering towards penalising industries which contribute to carbon emissions.
Mundra had also added that this could lead to higher risk weights and capital cost for banks' lending to such companies.
Shares of SBI ended down 1.5% at 282.05 rupees on the National Stock Exchange today.End

US$1 = 64.13 rupees

Edited by Akshit Harsh

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