Sustainable finance has become a critical tool in addressing climate change and fostering economic stability. As India’s central bank, the Reserve Bank of India (RBI) has undertaken several initiatives to integrate sustainability into the financial system. This paper explores the RBI’s contributions to green banking, including regulatory policies, green bonds, priority sector lending (PSL) for renewable energy, and ESG (Environmental, Social, and Governance) guidelines. The study employs a qualitative approach, analyzing RBI publications, government reports, and financial sector data to assess the effectiveness of these initiatives. Findings indicate that while RBI has made significant strides in green finance, challenges such as limited institutional awareness, regulatory enforcement gaps, and a lack of standardized green financial instruments remain. The paper concludes with recommendations for strengthening green finance frameworks and enhancing the integration of sustainability in India’s banking sector.