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

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  • Mahadevan, Vidya
  • Srivastava, Vikas
  • Subramaniam, Sowmya

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.

Suggested Citation

  • Mahadevan, Vidya & Srivastava, Vikas & Subramaniam, Sowmya, 2025. "Green lending: A route to improved loan quality in Indian banks," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325001552
    DOI: 10.1016/j.frl.2025.106891
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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