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Sovereign Green Bonds are to be issued by RBI

Published on January 08, 2023
Current Context: The Reserve Bank of India (RBI) has stated that it intends to issue two tranches of Rs 8,000 crore in Sovereign Green Bonds on January 25 and February 9. The proceeds from the bonds will go toward public sector initiatives targeted at lowering India's economy's carbon intensity.
Sovereign Green Bonds are to be issued by RBI
  • Specifics about the Bonds
    • The bonds will be sold in two denominations, at Rs 4,000 crore each, with maturities of five and ten years. Five percent of the entire amount will be set aside for retail investors, and they will be released through uniform price auctions.
    • The bonds can be used as suitable investments for Statutory Liquidity Ratio (SLR) reasons and Repurchase Transactions (Repo). Through the RBI's "Revised Scheme of Underwriting Commitment and Liquidity Support," primary dealers would be eligible to participate in the auction.
  • Government Debt Plans
    • As part of its borrowing schedule for the second half, the Indian government earlier declared its plan to raise Rs 16,000 crore through sovereign green bonds. The government's overall borrowing goal for the second half of the year is Rs 5.92 lakh crore, which includes the bonds.
  • Sovereign Green Bonds
    • Sovereign green bonds are bonds that are issued by a national government and whose proceeds are used to finance environmentally friendly projects. These projects could include renewable energy, energy efficiency, pollution prevention, and conservation, among others.
    • The issuance of sovereign green bonds represents an effort by governments to encourage investment in sustainable development and mitigate the negative impacts of climate change.

Question: 

Q.1 How much amount of Sovereign Green Bonds will be issued by the RBI? 
a. 7000 crore
b. 5000 crore
c. 8000 crore
d. 10,000 crore
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