The International Financial Services Centres Authority (IFSCA) invited public comments on the draft framework on sustainable lending by financial institutions. “The framework wants to promote the IFSC banking units (IBU) and finance companies/ finance units (FC/FUs) to develop a complete board-approved policy on the green, social, sustainable or sustainability linked lending,” IFSCA said in a statement.

The guidance will provide a framework for the adoption of principles aligned with the existing international standards through green/ social loan principles made by loan market association (LMA), bond principles created by the International Capital Markets Association (ICMA), Climate Bond Standards by Climate Bonds Initiative and any other similar standards, it said.

Banks and financial institutions are essential players and can support this growth by directing financial flows to sustainable and climate-friendly solutions through lending capital for sustainable and sustainability-linked projects. However, banks and financial institutions will have to guarantee transparency in this process to avoid concerns like greenwashing.