RBI eyes improved risk appraisal for green project funding

RBI Governor Sanjay Malhotra highlighted increased credit risks for lenders funding emerging green technologies, which have limited reliability and track records. He called for improved risk appraisal mechanisms for financing these projects. Malhotra emphasized the need for coordination among financial regulators and government agencies to address climate change risks. He noted that capacity constraints hinder effective risk assessment and financing of climate-related projects. The RBI plans to enhance its support for climate finance through initiatives like a dedicated cohort on climate change risks and a special "Greenathon." Malhotra stressed the importance of developing a robust risk management framework for climate-related financial risks.