DBS Bank India and Mahindra & Mahindra have signed an agreement to launch what the companies say is the first sustainability-linked dealer financing programme in India’s automotive sector, tying dealers’ borrowing costs to their environmental performance.
The programme, announced on 19 May, offers Mahindra’s authorised dealers preferential interest rates on loans for buying passenger and commercial vehicles, with the rate depending on how each dealership scores against a defined set of ESG criteria. The metrics were jointly designed by Mahindra and DBS.
The framework measures dealerships against Mahindra’s Green Dealership Programme requirements, covering greenhouse gas emissions, water consumption, renewable energy use, rainwater harvesting, waste management, the availability of public EV charging facilities, and the number of electric SUVs a dealership sells. Dealers are ranked on those scores, with commercial benefits attached to those making progress on both ESG criteria and sales targets.
Mahindra’s authorised dealers buy vehicles from the manufacturer before selling them on, so the financing programme gives Mahindra a lever to push decarbonisation down its dealer network and cut Scope 3 emissions, the indirect emissions across its value chain.
Nalinikanth Gollagunta, CEO of the Automotive Division at Mahindra & Mahindra, said:
“The launch of this financing programme will enable us to step up the breadth of our decarbonisation efforts, bring our dealerships into the fold and drive a reduction in Scope 3 emissions.”
Divyesh Dalal, Managing Director and Country Head of Global Transaction Services, DBS Bank India, said:
“Our new financing programme goes beyond the balance sheet, providing the practical tools needed to decarbonise their dealer network at scale. We have leveraged our cross-border expertise to customise this innovative solution that supports our client’s growth, while driving the transition to a net-zero future.”
The programme aligns with Mahindra’s wider decarbonisation push, which saw it take a leadership position in the 2026 S&P Global Sustainability Yearbook (DJSI). It also tracks the Indian government’s tightened Nationally Determined Contribution targets under the Paris Agreement, part of its commitment to reach net-zero emissions by 2070.
DBS has been present in India for over 30 years, having opened its first office in Mumbai in 1994. It was the first among the large foreign banks in India to operate as a wholly owned, locally incorporated subsidiary, and following its 2020 merger with Lakshmi Vilas Bank, it now operates across around 350 locations in 19 Indian states. Mahindra, founded in 1945, is the world’s largest tractor company by volume and operates across automotive, farm equipment, IT, financial services and renewable energy.
