RBI to issue norms to boost green finance, mitigate climate risks
Mumbai, Feb 8, 2023
The Reserve Bank of India will soon issue guidelines for regulated entities to boost green finance and mitigate climate-related financial risks, the central bank governor said on Wednesday.
"It has been decided to issue guidelines for regulated entities on one, a broad framework for acceptance of green deposits, two, disclosure framework for climate-related financial risks and three, guidance on climate scenario analysis and stress testing," Shaktikanta Das said while announcing the Monetary Policy Committee's interest rate decision.
These measures together will ensure that India's financial system starts to build resilience to withstand any possible vulnerability to climate change, he said, adding that the move I is "quite timely."
In July, the RBI released a discussion paper exploring strategies to address climate change-related financial risks.
The paper suggested that regulated entities use stress testing and climate scenario analysis to identify and assess vulnerabilities in their businesses.
The central bank's latest announcements come amid a push to boost sustainable financing to fund green infrastructure projects in India.
The federal government sold its first tranche of sovereign green bonds in January, raising 80 billion rupees, with a yield 5-6 basis points below that of comparable government securities.
The RBI's announcements are the first set of measures, Das said. A few more measures will follow in due course, he added.