The Reserve Bank of India’s (RBI) deputy governor stated that India is exploring coverage for green deposits as climate change emerges as an overarching risk to the global economy and financial systems.
While addressing the 79th executive committee meeting of the International Association of Deposit Insurers (IADI) in Rome Patra said that according to the IADI’s surveys, 60 percent of DIs have formalised Environmental, Social, and Governance (ESG) policies and some are members of the Network for Greening the Financial System (NGFS).
He said, “This is what is keeping us awake in India – framing a comprehensive ESG policy incorporating elements of climate sustainability, investment in sovereign green bonds, measuring the impact of climate change on default risk and contingency planning for climate-related extreme events via actuarial analysis.”
Patra added that RBI is exploring appropriate coverage for green deposits, climate risk-based differential premiums and ex-ante funding needs for climate sustainability. “These new challenges will inevitably require effective coordination and information sharing between DIs and other national safety net participants as well as with those in other jurisdictions. Forums like this one will be the incubators of global coordination. The time to act is now,” he said.