Indian banks cut their coal financing by 19 per cent, from $3.5 billion in 2022 to $2.8 billion in 2025, according to a new dataset released by the German environmental organisation Urgewald. But the group warns the trend is fragile because very few banks have adopted coal restrictions.

Only two of India’s top 30 banks, Federal Bank and RBL Bank, have explicit coal exclusion or phase-out policies, Urgewald said. Axis Bank and IDFC have only weak commitments to limit exposure to carbon-intensive sectors.

The State Bank of India remains the largest lender to coal-based energy projects. Major recipients of coal loans include the Adani Group, NTPC, NLC India, JSW Energy, Indian Railways, Tata Power and Coal India.

Urgewald said the drop likely reflects India’s solar and wind build-out outpacing new coal capacity: India added 88 GW of solar and wind over two years against 14 GW of new coal. Total bank lending to Indian companies also fell, from $4.2 billion to $3.1 billion.