Banks can provide important leadership for the required economic renovation that will provide new opportunities for the creation of a strong and successful low-carbon economy. The main objective of this paper is to deeply understand how Indian banks are responding to environmental turbulence and to provide an overview of their action in view of green banking adoption, awareness, drivers, challenges and gaps etc. by a structured questionnaire supported by secondary data and reports published. The results reveal that there is a small group of banks in India that are leading the sector in tackling climate change, mapping carbon footprints internally and externally. Internationally, there are several initiatives underway but the response of Indian banks is tardy and sluggish especially in internationally consistent disclosures and environmental protocols, which can not only spur innovation but also help in pinpointing risk and also generate opportunity. This trend is clearly exhibited in major international initiative UNEP FI there is no single Indian signatory and only eight Indian signatory in CDP-India. Main reasons and challenges faced by Indian banks, which are shown by factor analysis, include 'Risk of failure of business to peers' and 'Lack of RBI mandates' as main barriers to adopting sustainability. Main drivers for employing environmental and sustainable issues are environmental and social pressure from society, improved brand reputation and opportunities for innovation. The main gaps identified by the Indian Banks requiring directives from regulatory bodies include: awareness and consciousness of sustainability issues; international guidelines and frameworks; sustainability reporting - formal frameworks and lucid and clear policies pertinent for banks operating in India; and training and development of relevant skills within bank employees so that they can use in core banking operations. The authors find that clear policies, formal information sharing and dissemination platforms, and proper guidance can significantly diminish the unpleasant impacts of operating activities.