This approach is crucial to safeguard financial stability. Estimates suggest that India requires at least 2.5% of its GDP annually in green financing to address infrastructure gaps exacerbated by climate events. The financial system must mobilize and reallocate resources effectively to contribute to the country's net-zero target. However, climate stress-tests reveal that public sector banks (PSBS) in India may be more vulnerable than private sector banks (PVBs).
Understanding Climate Risk
Climate risk encompasses the potential adverse effects of climate change on natural and human systems. As greenhouse gas emissions increase, the frequency and intensity of climate-related events such as extreme weather, rising sea levels, and changing precipitation patterns escalate. These changes pose significant risks to ecosystems, human health, and economies worldwide. Indian banks are not immune to these impacts, which threaten their asset quality, operational efficiency, and overall financial health.
In 2022, India experienced extreme weather events on 314 of 365 days. Despite this, major Indian banks have been unprepared to confront climate risks, according to a report by Climate Risk Horizons. This analysis, covering the year 2022-23, indicates significant gaps in the preparedness of the Indian banking sector to measure, manage, and mitigate climate risks. The study assessed the climate preparedness of India's 34 largest banks, with a combined market cap of Rs 29.5 trillion.
Key Findings
1. Inadequate Preparedness: Despite the accelerating impacts of climate change, significant gaps remain in the Indian banking sector's ability to handle climate risks. This includes a lack of clear policies and implementation plans for funding climate-related areas.
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Denne historien er fra August 2024-utgaven av BANKING FINANCE.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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The Rise Of Green Marketing: Driving Sustainable Change
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RBI CIRCULAR
Facilitating accessibility to digital payment systems for Persons with Disabilities Guidelines
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The Role and Impact of the Insolvency and Bankruptcy Code (IBC) in NPA Recovery
Indian banks, especially grappling with the mounting challenge of Non-Performing Assets (NPAs) within Scheduled Commercial Banks (SCBs), are experiencing a significant downturn in their capacity for credit recycling, resulting in reduced business opportunities and declining profits. However, various factors contributing to the severity of NPA problem are including macro-economic, political, and internal factors, emphasizing the complexity of the issue. With this background, the present study puts an effort to look at the role of the Insolvency and Bankruptcy Code (IBC) in NPA recovery and also showcasing its significance in resolving insolvency and maximizing creditor recovery.
Big Data in Banking: Analysing its Role, Advantages and Challenges
Globally Inflation started rising post April 2021 and went above the target range set by most of the Central Banks. It had remained low and dormant for a substantial duration since the global financial crisis. CPI inflation in developed countries such as US, UK and Euro zone, began to exceed their traditional target of 2% and continue to stay at these elevated levels till recent time.
Is SIP Always the Best Option? A Look into Lump-Sum vs SIP During Volatile Markets
SIP is a method of investing a fixed amount at regular intervals, typically monthly, into a mutual fund. It allows investors to buy more units when prices are low and fewer when prices are high, a process known as rupee cost averaging.
Strategies for Mutual Fund Retail Investors during market downturns
When stock markets experience a decline, mutual fund investors often face a sense of insecurity and apprehension. The volatility can lead to impulsive decisions, which, rather than securing financial health, may impair long-term investment objectives.
Fraud Risk Management In Banking
Fraud risk management is a fundamental aspect of overall Risk Management within the banking sector. In India, banks adhere strictly to guidelines set forth by the Reserve Bank of India (RBI) to prevent, detect, and promptly report fraudulent activities.
