An efficient, sustainable and green procedure for the synthesis of selective orthorhombic iron(oxalate) capped Fe(0) [Fe(ox)–Fe(0)] nanomaterial is developed using sodium borohydride (NaBH₄) reduction of iron(II) salt in the presence of oxalic acid at room temperature in water. The reported method is a cost-effective chemical route for producing Fe(ox)–Fe(0) nanomaterial on the gram scale without high-temperature calcination. The oxidation of Fe(0) to Fe₃O₄ at room temperature in open air leads to Fe-oxalate capped Fe₃O₄ [Fe(ox)–Fe₃O₄] nanomaterial on the gram scale. The Fe(ox)–Fe₃O₄ nanomaterial is found to be useful as a magnetically recoverable catalyst for the selective synthesis of bis(indolyl)methanes from the condensation between aldehydes and indoles in water. The as-prepared Fe(ox)–Fe₃O₄ nanomaterials also show an excellent ability as a reusable catalyst for the degradation of methylene blue (MB) under UV irradiation and are expected to be useful in many other applications. Aqueous reaction medium, easy synthesis, effortless separation of the catalyst using an external magnet, and efficient recycling of the catalyst make the protocol economical and sustainable.