The Reserve Bank of India (RBI) on Wednesday published its ‘Statement of Commitment to Support Greening India’s Financial System - Network for Greening the Financial System (NGFS)’ whereby it will explore how climate scenario exercises can be used to identify vulnerabilities in supervised entities’ (SEs) balance sheets and integrate climate-related risks into financial stability monitoring.
Identifying vulnerabilities
The central bank will also identify vulnerabilities in SEs’ business models and gaps in capabilities for measuring and managing climate-related financial risks.
As part of its Statement of Commitment to Support Greening India’s Financial System-NGFS, the RBI said it will build awareness about climate-related risks among regulated financial institutions and spread knowledge about issues relating to climate change and methods to deal with them accordingly.
The central bank’s commitment takes into account national commitments, priorities and complexity of the financial system.
The RBI had joined the Central Banks and Supervisors NGFS as a member on April 23, 2021, to benefit from the membership of NGFS by learning from and contributing to global efforts on green finance.