ESG-compliant risk assessment in focus for HDFC Bank
HDFC Bank has adopted risk assessment practices based on Environmental, Social and Governance (ESG) frameworks for wholesale banking loans as the country’s largest private lender looks to step up sustainable finance efforts and drive responsible lending, a top executive said.
“We have adopted in our wholesale bank a risk assessment of our customers in terms of where do they stack up for their environment compliances. And that becomes a criteria of evaluation as we examine each proposal,” Kaizad Bharucha, Deputy Managing Director, HDFC Bank, told reporters at an event organised by the lender in Varanasi.
According to official disclosures by the lender, loans in excess of Rs 100 crore are subject to HDFC Bank’s ESG Risk Management Framework for Lending, wherein a detailed E&S (environmental and social) assessment is undertaken. In particular, wholesale borrowers with a direct customer risk greater than Rs 100 crore across facilities are subject to a detailed E&S due diligence assessment while exposures up to Rs 50 crore are subject to an abridged E&S due diligence.
Speaking about the bank’s Corporate Social Responsibility (CSR) programme ‘Parivartan’ Bharucha said that the lender has set a goal to increase income of 5 lakh marginal farmers earning less than Rs 60,000 annually by 2025.
From Rs 118.25 crore in 2014-15, the bank’s CSR allocation towards the Parivartan programme has risen to Rs 945.31 crore 2023-24. According to the Companies Act, 2013, certain classes of profitable companies are required to spend at
