Unsung Saviours: Deposit Insurance amid Climate Change
BW Businessworld|24 August 2024
DEPOSIT INSURANCE, a key component often managed by central bankers, is essential for maintaining financial stability.
Srinath Sridharan
Unsung Saviours: Deposit Insurance amid Climate Change

By protecting depositors and bolstering confidence in the banking system, central bankers act as unsung heroes, intervening decisively during banking crises to uphold the financial system’s integrity. As climate change introduces new and unpredictable risks, their role becomes increasingly pivotal.

India’s target of achieving net-zero emissions by 2070 will scale the importance of deposit insurance in ensuring financial resilience. The intersection of climate change and financial stability presents novel challenges that necessitate a robust framework to protect depositors and sustain confidence in the banking system. In India, deposit insurance is managed by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the Reserve Bank of India (RBI). Established under the Deposit Insurance and Credit Guarantee Corporation Act of 1961, the DICGC provides insurance coverage for depositors of up to Rs 5 lakh in the event of a bank failure. It also offers credit guarantees to banks, reinforcing the stability and trustworthiness of the Indian banking system.

Climate change introduces both physical and transition risks that can significantly impact banks and financial institutions. Extreme weather events may lead to asset damage and operational disruptions, while the shift towards a low-carbon economy can affect the value of assets in carbon-intensive sectors. These risks elevate the likelihood of bank failures, putting additional pressure on deposit insurance schemes. As such, deposit insurers must adapt their strategies to address these emerging threats, ensuring they maintain sufficient reserves and capital buffers to manage potential climate-induced claims.

Diese Geschichte stammt aus der 24 August 2024-Ausgabe von BW Businessworld.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

Diese Geschichte stammt aus der 24 August 2024-Ausgabe von BW Businessworld.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

WEITERE ARTIKEL AUS BW BUSINESSWORLDAlle anzeigen
MEMORIES & IMPRESSIONS
BW Businessworld

MEMORIES & IMPRESSIONS

Ratan Tata was an exceptional human being. He was a visionary leader, esteemed industrialist, and a humanitarian, who left an indelible mark on India and the world.

time-read
3 Minuten  |
October 19, 2024
The Robotaxi Market
BW Businessworld

The Robotaxi Market

The robotaxi market is shaping up to be a high-stakes battleground as tech giants and automakers race to transform urban mobility.

time-read
1 min  |
October 19, 2024
And the Nobel Prize Goes to AI
BW Businessworld

And the Nobel Prize Goes to AI

The recent Nobel Prize T awards to AI pioneers affiliated with Google have sparked a broader conversation about Big Tech's influence on research and the limitations of traditional prize categories.

time-read
1 min  |
October 19, 2024
Ola Electrified
BW Businessworld

Ola Electrified

Once considered a trailblazer in India’s electric vehicle (EV) ecosystem, Bhavish Aggarwal’s Ola Electric now faces a major accountability crisis.

time-read
1 min  |
October 19, 2024
Sharp Slide in Industrial Output on Eve of Deepavali
BW Businessworld

Sharp Slide in Industrial Output on Eve of Deepavali

India’s index of industrial production (IIP) saw a sharp reversal in August, contracting by 0.1 per cent, in stark contrast to the 4.7 per cent growth in July, mostly because of significant contractions in mining and electricity generation.

time-read
1 min  |
October 19, 2024
Heralding the Solar Era with Sustainable Electrification
BW Businessworld

Heralding the Solar Era with Sustainable Electrification

RAJEEV KASHYAP on the economics of solar power, the hurdles in scaling it, and much more

time-read
2 Minuten  |
October 19, 2024
A WELL-GREASED MACHINE
BW Businessworld

A WELL-GREASED MACHINE

The OmniBook X14 laptop runs on first-generation Snapdragon X Elite, which bets big on Al-enabled productivity and battery life, but falls short when it comes to overall experience, says Deep Majumdar

time-read
4 Minuten  |
October 19, 2024
DO NOT LETA HEALTH CRISIS RUIN YOUR FINANCIAL HEALTH
BW Businessworld

DO NOT LETA HEALTH CRISIS RUIN YOUR FINANCIAL HEALTH

For a family of four living in a metro, it is recommended to opt for a family floater health insurance plan with a sum insured of at least Rs 15-20 lakh

time-read
7 Minuten  |
October 19, 2024
Disruption Ahead: Beyond Organisation Charts and Structures
BW Businessworld

Disruption Ahead: Beyond Organisation Charts and Structures

ALBERT EINSTEIN FAMOUSLY said, “We cannot solve our problems with the same thinking we used when we created them.

time-read
3 Minuten  |
October 19, 2024
Dr. Rahul Shivajirao Kadam: A Visionary Leader Blending Sustainability, Innovation, And Social Empowerment
BW Businessworld

Dr. Rahul Shivajirao Kadam: A Visionary Leader Blending Sustainability, Innovation, And Social Empowerment

We are on the stage of global warming, and these technologies not only help prevent further damage but also leave behind a better environment for future generations.

time-read
2 Minuten  |
October 19, 2024