State banks have a new corporate loan filter

Reuters New Delhi: Public sector banks have begun integrating environment, social and governance (ESG) parameters into corporate credit risk assessment . Seven banks, including the country's largest lender, State Bank of India , have taken lead in this regard and are strengthening their credit assessment parameters and building sectoral capabilities, according to a review under the banks' reforms agenda. Lenders are also formalising climate risk frameworks for portfolio monitoring and credit workflows, and adopting the Partnership for Carbon Accounting Financials (PCAF) methodology for standardised financed-emission calculations. These developments have been shared with the government and are being monitored under the EASE 9.0 Reform Agenda , said people familiar with the matter. Also Read: Centre releases Rs 1.09 lakh crore to states five days early, UP gets biggest share "These parameters are included under the Socio-economic Impact (for Viksit Bharat) and banks are further developing expertise towards sustainable finance , inclusive banking and empowering emerging segments," said a bank executive, who did not wish to be identified. ET Bureau The Enhanced Access and Service Excellence (EASE) reforms, steered by the Department of Financial Services, are designed to modernise state-run lenders through governance, technology and risk-management upgrades. Live Events Also Read: Over half of street vendors may cut UPI acceptance if 0.4% MDR is introduced: ISB study Under Ease 9.0, banks are developing a framework for efficient capital, liquidity management through capital recycling, economic capital integration and advanced behavioural models. According to the review for the first quarter of this financial year, lenders are also advancing investor relations through structured processes for stakeholder engagement and benchmarking with global banks. "The reform agenda will also be a benchmark for the new reforms committee announced by the government. At present, the focus is on strengthening operational risk frameworks, modernising core IT systems, lending for emerging sectors and sustainable finance," said another executive, who also spoke on condition of anonymity. As per the review, public sector banks have started to embed sector-specific models in credit underwriting capabilities, strengthening their credit appraisal process. In October, the government announced a high-level committee to recommend structural, institutional, regulatory and legislative reforms in the banking sector to make it globally competitive, financially inclusive and resilient, as India works towards Viksit Bharat 2047 , aiming to transition to a developed nation by the 100th anniversary of its independence. The panel will assess the long-term capital requirements of banks, development financial institutions and non-banking financial companies, and recommend funding sources and mechanisms to support credit growth. It will also review the Priority Sector Lending framework and Lead Bank Scheme to assess their relevance, effectiveness and coordination in promoting inclusive, balanced and data-driven credit delivery in line with evolving economic priorities and financial inclusion goals. Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our Economic Times WhatsApp channel ) Read More News on state bank of india Public Sector Banks ESG Parameters State Bank of India Credit Risk Assessment EASE 9.0 Reform Agenda Sustainable Finance Climate Risk Frameworks Partnership for Carbon Accounting Financials Viksit Bharat 2047 (You can now subscribe to our Economic Times WhatsApp channel ) Read More News on state bank of india Public Sector Banks ESG Parameters State Bank of India Credit Risk Assessment EASE 9.0 Reform Agenda Sustainable Finance Climate Risk Frameworks Partnership for Carbon Accounting Financials Viksit Bharat 2047 Prime Exclusives Investment Ideas Stock Report Plus ePaper Wealth Edition KYC and KYB: Inside Pidilite, the company that turned Fevicol into a word for a strong bond – Part 1 of 3 Seoul halts trading, Nifty has its best week since 2021: Money leaving the AI trade – will it land in India? Junk bonds are cracking at the bottom. Will the noise get loud enough to make ‘junk bond’ a household term again? PNG connections rise half a million, but how many use piped gas for cooking? Some elections matter more than you know: No crop changed in the fields, yet sugar, coffee and soya got cheaper in a day You can buy a walkie-talkie online. But can you legally use it? 1 2 3 View all Stories