ADVANCING SUSTAINABLE BANKING AND FINANCIAL INCLUSION IN INDIA THROUGH ESG INTEGRATION IN TECHNOLOGICAL DISRUPTIONS
Creators: name: Dr. Rashmi Akshay Yadav
name: Dr. Premalatha K. P
name: Dr. Shrinivas Patil
Publisher: name: Zenodo
Year: 2023
Subjects: ESG Integration, Technological Disruptions, Sustainable Banking, Financial Inclusion, Climate Risk, Responsible Banking

description: Abstract

Objective: This research delves into the incorporation of Environmental, Social, and Governance (ESG) principles in the context of technological disruptions in the Indian banking sector. It examines how the Reserve Bank of India (RBI) navigates this transformative path to promote sustainable banking practices and encourage financial inclusion while mitigating climate risks. Methodology: This study employs a comprehensive methodology that includes a literature review, an analysis of the regulatory efforts of the RBI, survey results, and Google Trend analysis. The framework accentuates the convergence of ESG principles and technology, illustrating their combined influence on banking operations and sustainability strategies. Findings: The research uncovers that banks are facing increasing pressure to address ESG concerns due to regulatory requirements, investor scrutiny, and consumer preferences for sustainability. Technological disruptions are pivotal in promoting the integration of ESG and fostering growth. Companies that merge ESG innovation with technology exhibit rapid expansion and attract investment. Notably, Mastercard's 2021 report highlights a significant surge in equity investments in ESG-oriented technological disruptions. Financial inclusion is advanced through technology-driven digital banking services, the promotion of gender equality, robust regulatory frameworks, and improved financial literacy. Multinational banks' sustainable practices drive financial inclusion, with FinTech contributing to Sustainable Development Goals (SDGs). The study introduces a framework that emphasizes the fusion of technology disruption and ESG integration, with a focus on automation, data analytics, and digital solutions to enhance ESG transparency and sustainability. The RBI's regulatory efforts encompass adopting responsible banking principles, aligning with global frameworks, and endorsing sustainable practices. Challenges persist for Indian banks in integrating ESG norms into lending practices, although certain banks are involved in ESG projects. The RBI's commitment to responsible banking is evident through its inclusion in CDP's leadership list and its corporate rating by ISS ESG. Originality: This research addresses a gap in the literature by examining how technological disruptions facilitate ESG integration in Indian banks, aligning sustainability with financial inclusion. It contributes to the literature on the transformative potential of the convergence of ESG and technology within the banking sector. Research Limitations: This study is limited in scope to the Indian banking sector and may not fully capture global intricacies. It primarily focuses on the efforts of the RBI, potentially missing insights from other stakeholders. Practical Implications: The findings offer guidance to Indian banks on enhancing ESG integration, harnessing technology for sustainable practices, and addressing climate risks. The framework assists banks in ingraining ESG values and achieving responsible banking. Social Implications: This research underscores the significance of ESG integration and technological disruptions in promoting societal well-being, enhancing financial inclusion, and advancing sustainable banking practices.