SBI Green Home Bank Loan

State Bank Of India has adopted a Green Banking Policy with an objective of contributing towards the fight against the adverse climate change. One of the initiatives approved by the Board for this purpose is incentivizing borrowers who go in for Green Projects, i.e. those projects which reduce Carbon Emissions and promote Renewable Energy. "Green Housing" or "Green Home" is one of the types of projects identified for this purpose.

What is Green Building?

Green Building is the practice of increasing the efficiency of buildings and their use of energy, water and materials and reducing building impacts on human health and environment, through better site location, design, construction, operation, maintenance and removal - the complete building life cycle. An effective Green Building can lead to:

  1. Reduced operating costs by increasing productivity and using less energy and water
  2. Improved public and occupant health due to improved indoor air quality
  3. Reduced environmental impacts.

Green buildings are certified by rating agencies, such as the Leadership in Energy and Environmental Design (LEED) rating system developed by the U.S. Green Building Council, Green Globes from Green Building Initiative, LEED INDIA rating, India Green Building Council (IGBC), and TERI-GRIHA from TERI-BCSD India. The rating is generally based on five categories of performance viz. (i) Sustainable Sites, (ii) Energy and Atmosphere, (iii) Water Efficiency, (iv) Indoor Environmental Quality, (v) Materials and Resources.

As presently SBI is the only Bank in the country supporting the cause of Green Buildings, got an opportunity to get first mover advantage in this elite business space by appropriate positioning of bank's offer. For this purpose "SBI Green Home Loan" has been given a distinguishing identity of its own in the form of a new product name, though strictly speaking, there is no major change in the features of the existing Home Loan products except 5% concession in margin, 0.25% concession in interest rate and waiver of processing fees.

Benefits of Green Buildings

Green Homes can have tremendous benefits, both tangible and intangible. The immediate and most tangible benefit is the reduction in water and operating energy costs right from day one, during the entire life cycle of the building. The energy savings could range from 20 - 30 % and water savings around 30 - 50%. Green Homes Rating tool can also enhance marketability for the project. Intangible benefits of Green Homes include enhanced air quality, excellent day lighting, health & well-being of the occupants, safety benefits and conservation of scarce national resources.

National Priorities Addressed in the Rating System

The Green Homes Rating System addresses the most important National priorities which include water conservation, handling of consumer wastes, energy conservation, conservation of resources like wood and lesser dependence on usage of virgin materials.

Water Efficiency:

Most of the Asian countries are water stressed and in countries like India the water table has reduced drastically over the last decade. Green Homes encourages use of water in a self - sustainable manner through reducing, recycling and reusing strategies. By adopting this rating programme green homes can save potable water to an extent of 30 - 50%.

Handling of Consumer Waste:

Handling of wastes in residential buildings is extremely difficult to handle as most of the waste generated is not segregated at the time of disposal and has a high probability of going to landfills. This would be a challenge to the municipalities which needs to be addressed. The IGBC Green Homes rating programme encourages waste management through segregation, storage and effective disposal.

Energy Efficiency:

The residential sector is a large consumer of electrical energy. IGBC Green Homes can reduce energy consumption through energy efficient lighting, air conditioning systems, motors, pumps etc., The rating system encourages green homes which select and use BEE labelled equipment and appliances. The energy savings that can be realized by adopting this rating programme can be to the tune of 20 - 30%.

Reduced Use of Fossil Fuels:

Fossil fuel is a slowly depleting resource, world over. The use of fossil fuel for transportation has been a major source of pollution. The rating system encourages the use of alternate fuels for transportation and captive power generation.

Reduced Dependency on Virgin Materials:

The rating system encourages projects to use recycled & reused material and discourages the use of virgin wood thereby addressing environmental impacts associated with extraction and processing of virgin materials. Reduced usage of virgin wood is also encouraged.

Health and Well-being of Occupants:

Health and well-being of occupants is the most important aspect of Green Homes. IGBC Green Homes Rating System ensures minimum performance on day lighting and ventilation aspects which are critical in a home. The rating system recognizes measures to minimize the indoor air pollutants.