RBI mulling insurance for green deposits

RBI is exploring appropriate deposit insurance coverage for green deposits, climate risk-based differential premiums and ex ante funding needs for climate sustainability, according to Michael Debabrata Patra, Deputy Governor.

“Looking ahead, the evolution of the deposit insurance function is likely to confront more complex challenges amidst heightened uncertainty.”

“For instance, climate change is emerging as an overarching risk to the global economy and financial systems,” Patra said, in his keynote address at the 79th Executive Committee Meeting of International Association of Deposit Insurers (IADI) at Rome on June 14.

According to the IADI’s surveys, 60 per cent of deposit insurers have formalised Environmental, Social, and Governance (ESG) policies, and some are members of the Network for Greening the Financial System (NGFS).