As India steps up its green transition, regulators will play a critical role in minimising risks and ensuring the decarbonisation goals are met.
There is a need to introduce reforms and instruments that can really bring in much-needed capital for green transition, said experts and industry stakeholders in New Delhi on Thursday, while speaking at the recently held The Energy Transition Dialogues organised by the Global Energy Alliance for People and Planet (GEAPP).
Brij Raj, Chief General Manager, Reserve Bank of India (RBI), said regulation can play an important role in increasing the uptake of green credits in India. “The RBI is doing a lot of work in this regard. The central bank can support the mobilisation of the finances required for facilitating green transition and so on. And, globally, if you look at most central banks, they are using what is called as positive reinforcement and they are using a policy of giving incentives and so on for supporting green transition and encouraging green credits.”
In April 2021, the RBI joined the Network for Greening the Financial System (NGFS) as a supervisor. Today, its membership has increased significantly; more than 127 central banks and 20 other leading entities are member-supervisors.
“This shows how much interest in green credits and climate risk management is on the agenda for central banks and supervisors globally. In recent years, we also tweaked our policy measures. For instance, renewable energy has now been made part of the lending for renewable energy, and has been made part of priority sector lending,” said Raj.
In 2023, the RBI supported the government in its sovereign green bond insurance. In the second half of this financial year, another Rs 20,000-crore sovereign green bond insurance is being lined up.
“In May this year, we came out with a report on financial finance, which has a theme of a greener, cleaner India. There is a very important data point in this report, which suggests that the green finance environment annually in India could be to the tune of 2.5% of its GDP, which is very, very important,” added Raj.
