The Reserve Bank of India (RBI), in the near future, plans to release norms on stress testing of climate-related financial risks, said a deputy governor on July 19.
RBI has taken proactive steps like including financing renewable energy projects under priority sector loans, introducing green deposits, and drafting a disclosure framework for climate-related financial risks. The official said.
“In near future, we plan to release guidance notes on scenario analysis, stress testing, and effective management of climate-related financial risks based on BCBS principles,” said deputy governor Rajeshwar Rao at J P Morgan India Leadership Series Lecture in Mumbai.
Given the important role played in financing by private sources, there is a need for regulators to put in place right climate information architecture to create a conducive environment to attract private capital for climate finance, the deputy governor said.
“Therefore, the role of disclosure frameworks which are consistent with internationally accepted norms is crucial,” the deputy governor said.