Rajeshwar Rao: Challenges and opportunities in scaling up green finance

Address by Mr Rajeshwar Rao, Deputy Governor of the Reserve Bank of India, at the Business Standard BFSI Insight Summit, Mumbai, 22 December 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

The inputs provided by Sunil Nair, Brij Raj and Pradeep Kumar are gratefully acknowledged.

1. A very good morning to all the distinguished dignitaries and participants at this BFSI Insight Summit being organised by the Business Standard. I am very happy to be amidst you today albeit virtually. In recent times, this event has become a well-regarded platform for debate and deliberation on contemporary issues in finance and has generated useful insights from the wisdom of distinguished speakers who have graced the previous summits.

2. As we look back over the past decade and a half, what is really striking is the fact that the financial sector has been buffeted by several financial storms which it has bravely weathered. After each episode, the endeavour had been to ensure that the institutions emerge stronger and more resilient, so as to support the continuing narrative of recovery and growth. The episodes of crisis of late have become more frequent with lesser breathing space afforded to the institutions to recover, recoup and be future ready. The evolving situation demands that both the regulators and the regulated entities remain ever ready and well equipped to face the emerging challenges, be it the growth of fintech, digitalisation of financial services, customer service or the challenges of cybersecurity in the financial services sector. But the key risk which I would like to discuss today is the impact of climate change and what it can mean for the financial services industry. In a way I am revisiting a topic on which I spoke about a year back - climate risk and green finance. While this issue may still be the new kid on the block as far as the deliberations in such financial gatherings are concerned, it is fast becoming a key issue which is being discussed globally and the urgency of the situation is more apparent to one and all.