Need To Mainstream Green Finance, Says RBI Deputy Governor M Rajeshwar Rao
NDTV
RBI Deputy Governor M Rajeshwar Rao on Monday emphasized on the need to mainstream green finance.
New Delhi: RBI Deputy Governor M Rajeshwar Rao on Monday emphasized on the need to mainstream green finance and think of ways to incorporate the environmental impact into commercial lending decisions. He added that it is simultaneously important to balance the needs of credit expansion, economic growth and social development. Green finance can apparently be defined as financing of investments that deliver environmental benefits in the broader context of environmentally sustainable development.
Addressing the the CAFRAL Virtual Conference on Green and Sustainable Finance, Mr Rao said, "Climate risks can impact the financial sector through two broad channels; first - physical risks which mean economic costs and financial losses resulting from the increasing severity and frequency of extreme weather events and long-term climate change and second - transition risks which arise as we try to adjust towards a low-carbon economy."
He stated that the fight against climate change is certainly a task for the global economy, society, and its institutions - including central banks.
Commenting on sustainable finance and role of RBI in a dynamic world, he said, "The Reserve Bank of India's mission (Utkarsh 2022) statement encompasses universal access to financial services and a robust, dynamic and responsive financial intermediation infrastructure and recognizes the importance of active and receptive financial intermediation. As the economy and financial system are not static, we need to appropriately respond to the changes around us. We also need to proactively consider new and emerging risks and opportunities while delivering monetary and financial stability in a time consistent manner."
