This study examines the impact of local banks on corporate green investment following the implementation of the Green Credit Policy (GCP) in China. Utilizing a difference-in-differences model, we analyze a sample of Chinese A-share listed firms in heavily polluting industries (HPFs) from 2008 to 2019. Our findings reveal that HPFs in cities with local banks significantly increased their green investments following the GCP implementation compared to those in cities without local banks. This improvement is enhanced by corporate environmental information disclosure. Furthermore, the positive impact of local banks is more pronounced in regions with stricter regulatory environments and among politically connected firms. However, HPFs in cities with local banks experienced a decline in profitability and firm value post-GCP implementation. Our study identifies the role of local banks as regional intermediaries in promoting corporate green investment and provides insightful implications for financial institutions and policymakers.