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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'Deep Fake' - an emerging risk for Banking & Financial Sector
Deepfake KYC fraud is a growing concern in India, where fraudsters leverage AI-generated deepfake videos and images to bypass Know-Your-Customer (KYC) verification processes. This has significant implications for financial institutions, fintech companies, and other organizations that rely on KYC to verify the identity of their customers.
RBI CIRCULAR
Operational framework for reclassification of Foreign Portfolio Investment to Foreign Direct Investment (FDI) - November 11, 2024
India's Fiscal Discipline: A Path to Economic Stability and Growth
In a significant economic development, the fiscal deficit for the financial year 2023-2024 (FY24) has been recorded at 5.6% of GDP, falling below the government's revised estimate. This unexpected positive outcome highlights effective fiscal management and a recovering economy, offering a ray of optimism amidst global economic uncertainties.
Augmenting Productivity by Embracing Employee Engagement
As the world's largest coffeehouse chain, Starbucks is a brand that understands the value its employees add to the business. At Starbucks, every employee knows they are valued members of the team. It took Starbucks some time to do this. They have prioritized implementing employee-friendly rules from the beginning.
Ethics in Artificial Intelligence: Navigating the Future Responsibly
Ethics in AI encompasses a wide range of issues, including fairness, accountability, transparency, and the potential for bias. At the core of these discussions lies the question: How do we ensure that AI serves humanity rather than undermines it? As AI systems increasingly influence critical areas such as healthcare, finance, and law enforcement, the stakes are high.
Digital Banking: The Need of the Hour
Development of an economy, especially economic growth primarily depends on industrial development. The industries depend on financial institutions support for funds especially from banks. Banks encourage individuals save and mobilise funds from bank deposits.
Cyber Crimes in Banking: India's Battle Against the Digital Menace
The increasing adoption of digital banking services has transformed the way Indian consumers engage with banks. According to research from the Reserve Bank of India (RBI), the country's digital payment ecosystem expanded by approximately 55% between 2021 and 2023.
Legal News
The Supreme Court (SC) ruled that clauses allowing public sector undertakings (PSUs) to unilaterally appoint arbitrators to resolve disputes with private contractors are invalid.
The Rise Of Green Marketing: Driving Sustainable Change
Green marketing refers to the practice of promoting products or services that are environmentally friendly or sustainable. It involves incorporating eco-friendly elements into various aspects of marketing strategies, including product development, packaging, advertising, and distribution.
ICICI Bank partners with PhonePe to offer instant credit on UPI
ICICI Bank announced that it has partnered with PhonePe to offer instant credit on UPI to its pre-approved customers on the app of the digital payments company.
