⇒ NITI Aayog, Rocky Mountain Institute (RMI), and RMI India released a report, titled ‘Banking on Electric Vehicles in India’ on 21 January 2022. It outlines the importance of priority-sector recognition for retail lending in the electric mobility ecosystem.
- The report provides considerations and recommendations to inform the inclusion of EVs in the Reserve Bank of India’s priority-sector lending guidelines.
Key Points:
» Banks and non-banking financial companies (NBFCs) in India have the potential to achieve an electric vehicle (EV) financing market size of Rs 40,000 crore (USD 5 billion) by 2025 and Rs 3.7 lakh crore (USD 50 billion) by 2030.
» Priority-sector lending aims to expand financial access and support employment opportunities in India.
- In order to meet these goals, the report highlights that the RBI may consider various EV segments and use cases based on five parameters:
- Socio-economic potential
- Livelihood generation potential
- Scalability
- Techno-economic viability
- Stakeholder acceptability
» The report indicates that electric two-wheelers, three-wheelers, and commercial four-wheelers are early segments to prioritise under PSL.
» To maximise the impact of the inclusion of EVs, the report also recommends a clear sub-target and penalty mechanism for priority sector lending to renewable energy and EVs.
» Furthermore, it suggests recognition of EVs as an infrastructure sub-sector by the Ministry of Finance and the incorporation of EVs as a separate reporting category under the RBI.