The rise of sustainable finance has significantly transformed the strategic function of banks in developmental terms, especially in emerging markets where banking is inherently tied up with developmental policies. The present research aims at assessing the adoption of Environmental, Social, and Governance (ESG) practices, Corporate Social Responsibility (CSR), and sustainable banking strategies in State Bank of India and HDFC Bank representing India’s leading public and private banks, during last five years i.e. Financial Year 2020–21 to Financial Year 2024-25 in the context of India's Viksit Bharat 2047 initiative. This research uses a qualitative longitudinal approach based on thematic content analysis of annual reports, Business Responsibility and Sustainability Report (BRSR), ESG information, and CSR documents. The sustainability performance of banks is measured across four dimensions that are interrelated - environmental responsibility, social inclusion, governance mechanisms, and sustainable banking. The research also focuses on the green finance practices, digitization of banking, financial inclusion, women-specific developmental projects, and governance institutionalization. The findings of the study suggest that there has been a gradual shift from the practice of compliance-based CSR toward the establishment of embedded ESG governance. However, State Bank of India demonstrates stronger alignment with developmental banking priorities with the practice of developmental banking, involving activities related to the provision of financial services to rural areas, priority sector lending, and widespread financial inclusion initiatives. On the other hand, the ESG formalization, transparency, and technological adaptation are better seen in HDFC Bank exhibits comparatively stronger ESG formalization. Digital banking has become a crucial sustainability strategy as opposed to simply being an operational tool. Increased digitalization has led to a decrease in transaction frequency, enhanced financial inclusiveness, better scalability of services, and carbon-friendly banking operations. In addition, green finance and renewable energy finance have become strategic focal points, although there is significant room for improvement regarding climate risk management practices, financed emissions accounting, and transition risks assessments in the sector (Ozili, 2023; Tandon et al., 2021). This research will make an important contribution to the field of sustainable banking by highlighting the importance of recognizing that sustainability in Indian banking does not fit into traditional theories of corporate sustainability from a global perspective. On the contrary, sustainable Indian banking has been entrenched in developmental governance, inclusionary state policies, and institutional nation-building. It highlights the importance of enhancing standardized ESG disclosures and sustainable finance strategies.