Appendix F: Indicative Term Sheet --- NbS Impact Term Deposit
This appendix presents an indicative term sheet for the NbS Impact Term Deposit product described in Section 5 (Layer 4) of this report. The term sheet is formatted as a bank would produce it for distribution to prospective depositors and is presented in parallel for the Australian and Singaporean jurisdictions. All terms are indicative and subject to the issuing bank's final product approval, regulatory review, and market conditions at the time of launch.
INDICATIVE TERMS AND CONDITIONS
NbS Impact Term Deposit
| Field | Terms |
|---|---|
| Product Name | NbS Impact Term Deposit |
| Issuer | [Bank Name], a licensed authorised deposit-taking institution (ADI) regulated by the Australian Prudential Regulation Authority (APRA) (Australia); or a licensed bank regulated by the Monetary Authority of Singapore (MAS) (Singapore). |
| Product Type | Fixed-term deposit. The deposit is a standard banking deposit product with an additional commitment by the Issuer to allocate equivalent lending to independently rated Nature-based Solutions (NbS) projects. The NbS allocation commitment does not alter the deposit's character as a standard deposit instrument. |
| Currency | Australian Dollar (AUD) for Australian deposits; Singapore Dollar (SGD) for Singapore deposits. |
| Minimum Deposit Amount | AUD 250,000 (Australia); SGD 200,000 (Singapore). |
| Available Terms | 1 year, 2 years, 3 years, 5 years. |
| Interest Rate | The Issuer's prevailing term deposit rate for the equivalent tenor, minus 10 to 20 basis points (the "NbS Contribution Margin"). The NbS Contribution Margin reflects the Issuer's additional costs associated with independent NbS project rating, monitoring, third-party verification, and annual impact reporting. The interest rate is fixed for the term of the deposit and confirmed at the time of deposit placement. |
| Interest Payment Frequency | Semi-annual for 1-year and 2-year terms; annual for 3-year and 5-year terms. Interest is calculated on an actual/365 (Australia) or actual/365 (Singapore) day-count basis. |
| Capital Guarantee | Full principal protection at maturity. The depositor's principal is returned in full at the maturity date regardless of the performance of the underlying NbS projects. The NbS allocation is a use-of-proceeds commitment by the Issuer and does not create any direct financial exposure for the depositor to NbS project risk. The depositor's credit risk is solely to the Issuer (bank counterparty risk). |
| Early Withdrawal | Permitted subject to the Issuer's standard break costs for early withdrawal of fixed-term deposits. Break costs may include a reduction in the interest rate applied to the deposit for the period it was held, forfeiture of accrued but unpaid interest, or an administrative fee, as specified in the Issuer's standard terms and conditions for term deposits. Early withdrawal does not affect the depositor's entitlement to full return of principal. |
| Deposit Insurance | Australia: Eligible for the Financial Claims Scheme (FCS) administered by APRA, which provides depositor protection up to AUD 250,000 per account holder per ADI [1]. The NbS Impact Term Deposit meets the definition of a "protected account" under the Banking Act 1959 (Cth). Singapore: Eligible for the Singapore Deposit Insurance Corporation (SDIC) Deposit Insurance Scheme, which provides depositor protection up to SGD 100,000 per depositor per scheme member [2]. Deposits denominated in SGD and placed with a SDIC scheme member bank qualify for coverage. |
| Use of Proceeds | Deposited funds are allocated to a ring-fenced NbS lending pool maintained by the Issuer. The pool funds term loans, credit facilities, or guarantee structures for NbS projects that have received an independent NbS rating of NbS-BBB (investment grade) or above under the NbS Rating Methodology specified in this report. The ring-fenced pool is an accounting designation within the Issuer's balance sheet; it does not constitute a separate legal vehicle or trust. The Issuer commits to maintaining an NbS lending allocation at least equal to the total outstanding NbS Impact Term Deposits at all times. |
| Allocation Requirement | Minimum 80% of the NbS lending pool must be allocated to projects rated NbS-BBB or above. The remaining 20% may be held as unallocated liquidity within the Issuer's standard treasury management, pending identification and approval of additional eligible NbS projects. Allocation must be completed within 90 days of deposit receipt for at least 60% of new deposits, and within 180 days for the remainder. |
| Eligible NbS Projects | Projects must satisfy all of the following eligibility criteria: (1) Domiciled in an ASEAN member state (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam); (2) Independently rated NbS-BBB or above under the NbS Rating Methodology; (3) Registered with a recognised international standard (Verra VCS, Gold Standard, or equivalent nationally recognised standard); (4) Operating under a documented environmental and social safeguards framework that includes, at minimum, Free, Prior and Informed Consent (FPIC) protocols for projects affecting Indigenous or local community lands; (5) Subject to independent third-party verification of environmental and social outcomes at least annually. |
| Portfolio Diversification Requirements | The NbS lending pool must comply with the following diversification requirements at all times: (a) Geographic concentration: no more than 40% of the pool allocated to projects in any single ASEAN country; (b) Typological concentration: no more than 30% of the pool allocated to any single NbS project type (as classified under the eight-type NbS typology); (c) Minimum typological diversification: at least three distinct NbS typologies represented in the pool; (d) Rating quality: the weighted-average NbS rating of the pool must be maintained at or above NbS-A at all times. |
| Impact Reporting | The Issuer will provide the depositor with an annual NbS Impact Statement within 120 days of each annual reporting date. The Impact Statement will include: (a) list of NbS projects funded by the pool, including project name, location, NbS typology, current NbS rating, and area under management; (b) aggregate environmental metrics: total hectares under management, weighted-average Ecosystem Condition Index, total ecosystem services delivered (carbon sequestered in tCO2e, kilometres of coastline protected, hectares of habitat restored); (c) aggregate social metrics: number of community households benefiting, number of income streams supported, FPIC compliance status; (d) aggregate economic metrics: total NbS lending deployed, weighted-average NbS rating of pool, portfolio compliance with diversification requirements; (e) independent verification statement. |
| Independent Verification | The Issuer will commission annual independent third-party verification of: (a) allocation compliance (NbS lending pool balance relative to NbS deposit balance); (b) rating compliance (all projects in the pool hold current ratings at or above NbS-BBB); (c) diversification compliance (geographic, typological, and rating quality limits); (d) accuracy of the NbS Impact Statement. The verifier must be independent of both the Issuer and the NbS project sponsors. The verification report will be made available to depositors upon request. |
| Regulatory Framework | Australia: The product is issued under the Issuer's ADI licence and is subject to prudential supervision by APRA and conduct regulation by ASIC. The Issuer has prepared a Target Market Determination (TMD) in accordance with Part 7.8A of the Corporations Act 2001 (Cth) (Design and Distribution Obligations). The product's sustainability claims comply with ASIC Information Sheet 271 (INFO 271): How to avoid greenwashing when offering or promoting sustainability-related products [3]. Singapore: The product is issued under the Issuer's banking licence and is subject to supervision by MAS. The product is classified as a standard term deposit (not a structured deposit or investment product) under MAS guidelines. The Issuer's environmental risk management practices comply with MAS Guidelines on Environmental Risk Management for Banks [4]. |
| Taxonomy Alignment | Australia: The use-of-proceeds categories align with the Australian Sustainable Finance Taxonomy (ASFT) "green" classification for the Land Use sector, which covers ecosystem restoration, reforestation, mangrove conservation, and wetland rehabilitation [5]. Singapore: The use-of-proceeds categories align with the Singapore-Asia Taxonomy (SAT) "green" classification for the Agriculture and Forestry/Land Use sector [6]. The Issuer will publish a Taxonomy Alignment Statement annually as part of the NbS Impact Statement. |
| Disclosure Standards | The Issuer's NbS Impact Statement is structured to support the Issuer's disclosures under: (a) TNFD: the 14 recommended disclosures of the Taskforce on Nature-related Financial Disclosures, covering Governance, Strategy, Risk & Impact Management, and Metrics & Targets [7]; (b) ISSB: IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures) [8], with forward compatibility for the anticipated ISSB standard on Biodiversity, Ecosystems and Ecosystem Services. Template TNFD and ISSB disclosures for the NbS Impact Term Deposit are provided in Appendix G of this report. |
| Target Market | The NbS Impact Term Deposit is designed for investors who: (a) seek capital-protected deposit returns; (b) wish to allocate capital toward independently rated nature-positive outcomes in the ASEAN region; (c) have an investment horizon consistent with the available deposit terms (1--5 years); (d) accept a modest interest rate reduction (10--20 basis points) in exchange for verified NbS impact reporting. The target market includes high-net-worth individuals, family offices, institutional investors (superannuation funds, insurance companies, endowments), corporate treasury operations with sustainability mandates, and government agencies with nature-positive investment objectives. The product is not designed for investors seeking maximum yield or for investors who require immediate liquidity. |
| Maturity and Renewal | At the maturity date, the depositor's principal is returned in full, together with any accrued but unpaid interest. The depositor may elect to renew the deposit for a further term at the Issuer's then-prevailing NbS Impact Term Deposit rate. Upon renewal, the depositor will receive a cumulative impact report summarising the environmental, social, and economic outcomes attributable to the depositor's participation over the full period of deposit holding. |
Risk Factors
Prospective depositors should consider the following risk factors before placing an NbS Impact Term Deposit:
1. Issuer credit risk. The depositor's return of principal and payment of interest depend on the creditworthiness of the Issuer. The NbS allocation commitment does not alter the depositor's credit exposure, which is solely to the Issuer. In the event of the Issuer's insolvency, the deposit is subject to the relevant deposit insurance scheme (FCS in Australia up to AUD 250,000; SDIC in Singapore up to SGD 100,000). Amounts exceeding the deposit insurance limit rank as unsecured claims against the Issuer.
2. Interest rate risk. The interest rate on the NbS Impact Term Deposit is fixed for the term of the deposit. If market interest rates rise during the deposit term, the depositor will not benefit from the increase until the maturity date. The NbS Contribution Margin (10--20 basis points below the Issuer's standard term deposit rate) means that the depositor earns a lower return than would be available on a standard term deposit of the same tenor with the same Issuer.
3. Early withdrawal risk. Early withdrawal is subject to break costs that may reduce or eliminate the interest earned during the period the deposit was held. In some circumstances, the break cost may result in the depositor receiving less than the original deposit amount if the break cost exceeds the interest accrued.
4. NbS project performance risk (non-financial). While the depositor has no direct financial exposure to NbS project outcomes (principal and interest are obligations of the Issuer regardless of NbS performance), the depositor should be aware that NbS projects may underperform against environmental, social, or economic targets. Factors that may cause underperformance include: natural disasters (fire, flood, cyclone, drought) affecting project sites; climate change impacts (sea-level rise, temperature shifts, precipitation changes); management failure or sponsor default; social conflict or land tenure disputes; regulatory changes in ASEAN host countries; and market price declines for carbon credits or ecosystem products. Underperformance of NbS projects would affect the environmental impact reported to depositors but would not affect the financial return on the deposit.
5. Greenwashing risk. The Issuer relies on independent NbS ratings, third-party verification, and annual impact reporting to substantiate the product's nature-positive claims. Despite these safeguards, there is a risk that NbS projects may not deliver the environmental or social outcomes anticipated at the time of rating. The Issuer's responsibility is to maintain a credible process for project selection, monitoring, and reporting; it does not guarantee specific environmental outcomes.
6. Regulatory risk. Changes in prudential regulation, sustainability disclosure requirements, taxonomy definitions, or environmental law in Australia, Singapore, or ASEAN host countries may affect the product's terms, the Issuer's ability to maintain the NbS lending pool, or the eligibility criteria for NbS projects. The Issuer will notify depositors of any material regulatory changes that affect the product within 30 days of becoming aware of the change.
7. Currency risk. Deposits are denominated in AUD (Australia) or SGD (Singapore). Depositors whose functional currency differs from the deposit currency bear exchange rate risk.
8. Liquidity risk. The NbS Impact Term Deposit is a fixed-term instrument. The depositor has limited ability to access funds prior to maturity, and early withdrawal is subject to break costs. Depositors should ensure they do not require access to deposited funds before the maturity date.
Disclaimers
This Indicative Term Sheet is provided for information purposes only and does not constitute an offer, solicitation, or recommendation to place a deposit or enter into any transaction. The final terms and conditions of the NbS Impact Term Deposit will be set out in the Issuer's product documentation, which will be provided to prospective depositors prior to deposit placement.
The NbS Impact Term Deposit is a deposit product, not an investment product. The depositor does not acquire any ownership interest in, or direct exposure to, NbS projects funded by the ring-fenced lending pool. The depositor's relationship is solely with the Issuer as a deposit counterparty.
Past environmental or social performance of NbS projects does not guarantee future results. NbS ratings are assessments of project quality at a point in time and may change as new information becomes available.
This term sheet has been prepared for the purposes of an academic research report and does not represent an actual product offering by any financial institution.
Jurisdiction-Specific Notes
Australia
The NbS Impact Term Deposit is a "basic deposit product" for the purposes of the Corporations Act 2001 (Cth) and is exempt from the requirement to issue a Product Disclosure Statement (PDS). However, the Issuer is required to prepare a Target Market Determination (TMD) under the Design and Distribution Obligations (DDO) in Part 7.8A of the Corporations Act [9].
The sustainability claims associated with the product must comply with the Australian Consumer Law (Schedule 2 of the Competition and Consumer Act 2010) and with ASIC's guidance on avoiding greenwashing (INFO 271) [3]. The Issuer must be able to substantiate all environmental and social impact claims with verifiable evidence.
The product's contribution to the Issuer's mandatory climate-related financial disclosures under AASB S1 and AASB S2 (effective from FY2024--25 for Group 1 entities) should be documented within the Issuer's sustainability reporting framework [10].
Deposits of up to AUD 250,000 per account holder are protected under the Financial Claims Scheme administered by APRA [1]. The Issuer confirms that the NbS Impact Term Deposit qualifies as a protected account under the Banking Act 1959 (Cth).
Singapore
The NbS Impact Term Deposit is classified as a standard fixed deposit under MAS guidelines. It is not classified as a "structured deposit," "investment product," or "capital markets product" under the Securities and Futures Act 2001, provided that the interest rate is fixed and the depositor's return of principal is unconditional (i.e., not linked to NbS project performance) [11].
If the product were structured such that the depositor's return was linked to NbS project performance (e.g., a variable "nature impact bonus"), the product could be reclassified as a structured deposit, triggering additional MAS requirements under Notice SFA 04-N12 (Sale of Investment Products), including enhanced risk disclosure, suitability assessment, and a cooling-off period. The indicative terms presented here avoid this reclassification by maintaining a fixed interest rate and unconditional principal return.
The product's environmental claims should be consistent with the Association of Banks in Singapore (ABS) Guidelines on Responsible Financing and with MAS's expectations regarding environmental risk management [4][12].
Singapore Dollar deposits of up to SGD 100,000 per depositor per scheme member are protected under the SDIC Deposit Insurance Scheme [2].
The Issuer may apply for partial cost reimbursement for independent NbS rating verification under the MAS Green and Sustainability-Linked Loan Grant Scheme (GSLS), which subsidises the costs of external review for green and sustainability-linked loans [13]. While the GSLS was designed for loans rather than deposits, the independent verification of NbS allocation associated with the deposit product may qualify for subsidy if the Issuer can demonstrate alignment with the scheme's objectives.
References
[1] APRA, Financial Claims Scheme --- Information for Depositors (Sydney: Australian Prudential Regulation Authority). Coverage limit: AUD 250,000 per account holder per ADI.
[2] SDIC, Deposit Insurance Scheme: Coverage and Limits (Singapore: Singapore Deposit Insurance Corporation). Coverage limit: SGD 100,000 per depositor per scheme member.
[3] ASIC, Information Sheet 271: How to avoid greenwashing when offering or promoting sustainability-related products (INFO 271) (Canberra: Australian Securities and Investments Commission, June 2023).
[4] MAS, Guidelines on Environmental Risk Management for Banks (Singapore: Monetary Authority of Singapore, December 2020).
[5] ASFI, Australian Sustainable Finance Taxonomy: Version 1 (Melbourne: Australian Sustainable Finance Institute, June 2024).
[6] MAS and Green Finance Industry Taskforce, Singapore-Asia Taxonomy for Sustainable Finance (Singapore: Monetary Authority of Singapore, December 2023).
[7] TNFD, Recommendations of the Taskforce on Nature-related Financial Disclosures (September 2023).
[8] IFRS Foundation, IFRS S1: General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2: Climate-related Disclosures (London: IFRS Foundation, June 2023).
[9] ASIC, Regulatory Guide 274: Product Design and Distribution Obligations (RG 274) (Canberra: Australian Securities and Investments Commission, October 2021).
[10] AASB, AASB S1 General Requirements for Disclosure of Sustainability-related Financial Information and AASB S2 Climate-related Disclosures (Melbourne: Australian Accounting Standards Board, 2024).
[11] MAS, Notice SFA 04-N12: Sale of Investment Products (Singapore: Monetary Authority of Singapore, 2018).
[12] ABS, Guidelines on Responsible Financing (Singapore: Association of Banks in Singapore, 2018, updated 2022).
[13] MAS, Green and Sustainability-Linked Loan Grant Scheme Guidelines (Singapore: Monetary Authority of Singapore, revised January 2023).