Choosing a bank to park your savings in seems like a simple enough decision – maybe you choose one that has a branch close to your home or office, maybe you go with the one that your family has always banked with, or maybe you pick the one with the best interest rates or the lowest minimum balance requirement.
But there’s a lot more to it. When you park your money with a bank, the bank invests or loans out your savings to earn higher interests. Some of this money may find its way to sectors that don’t align with your values – like coal mining, natural gas, oil refining, etc.
Quite often, we’re confused about where and how we should invest our money. If nothing comes to mind, we tend to leave our money unattended in our savings bank account. The general belief is that there’s no risk of losing the capital amount, nor investing in stocks for fossil fuel and oil companies.
But what is your bank doing with your money? Surely, they’re not letting it sit idle. You wouldn’t imagine that your money is being used to fund mining projects, oil rigs to coal mines but that’s exactly what’s happening. When you check your monthly balance, the money exists, but only digitally. In reality, banks invest or loan out your savings to earn higher interests. And, some of that money trickles its way down to fossil fuel, oil and gas, tanneries – sectors that may not align with your values.
According to JP Morgan Chase, one of the biggest banks in America and consequently, around the world has been one of the largest financiers of fossil fuels providing over 310 billion dollars to extract oil, gas and coal. In India, the State Bank of India and HDFC are two of the banks that have a global presence for funding fossil fuels.