The demand puts the treatment of green deposits at the centre of efforts to expand green lending in India. Banks want a lower CRR for these deposits, with the expected benefit of cheaper funding and additional capacity to provide loans.

The backdrop is a deposit pool that remains too small. Estimates cited in the report suggest green deposits have not yet reached the scale considered necessary. However, the supplied report gives neither their current value nor a target size.

A reduced CRR could ease funding expenses and free up capital for loans. This is the benefit banks are seeking, rather than an outcome already achieved. The report describes a request for a change; it does not state that any reduction has been approved.

Important details remain unstated, including the size of the requested cut, which banks are pressing for it and any possible implementation date. There is also no stated response from the regulator, leaving the proposal's next steps unclear.