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.
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Denne historien er fra 24 August 2024-utgaven av BW Businessworld.
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'Committed to helping India achieve carbon neutrality'
R. Purushothaman on how Danfoss India, part of Danish MNC, is supporting the nation's carbon neutrality goals with innovative products
INTELLECTUAL DEPTH & ACTIONABLE INSIGHTS
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AN INDUSTR BENCHMAR
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"MACARONS FOR THE MASSES"
CHANDNI NATH ISRANI, the driving force behind Ladurée's India expansion, redefines luxury in the F&B sector. With four flourishing Ladurée outlets established since 2021, Israni is making iconic French pastries and delicacies accessible to the Indian market. BW Businessworld sits down with the visionary entrepreneur to discuss her journey in building the luxury brand and her strategy for democratising gourmet experiences
NAVIGATING THE PATH TO PROFITABILITY: A STARTUP'S BALANCING ACT
WHEN EVALUATING startup profitability, it’s crucial to break it down into two main components: unit economics and fixed costs. Unit economics refers to the profitability of delivering each singular order, which involves analysing transaction margins against costs incurred, such as delivery and payment gateway fees. This assessment helps gauge whether a business model is sustainable at a micro level.
THE HOLY GRAIL OF PROFITABILITY
Profitability for startups is elusive, often overshadowed by growth and investor expectations. Achieving profitability requires a delicate balance between revenue generation and cost management, with factors like market dynamics and competition playing significant roles
"WE ARE FOCUSED ON BUILDING A RESILIENT AND SELF-SUSTAINING SEMICONDUCTOR ECOSYSTEM"
S.KRISHNAN, Secretary of the Ministry of Electronics and Information Technology, outlines India's ambitious plan to build a resilient and globally competitive semiconductor industry through the India Semiconductor Mission
Shaping the Future of Cyber Risk Management
With its mission to advance cyber risk quantification through the FAIR (Factor Analysis of Information Risk) model, the institute empowers businesses to align cybersecurity with broader objectives using structured, data-driven insights. Managing Director TODD TUCKER discusses how the institute’s methodologies and community-driven approach are reshaping industry standards worldwide, including growing interest in India and Asia Pacific
THE PILLAR OF A RESILIENT DIGITAL FUTURE
The rapid evolution of digital technologies has transformed the world, driving unprecedented connectivity and innovation. Yet, as the digital realm expands, so do vulnerabilities, with cyber threats emerging as critical challenges for businesses, governments and individuals
