India tops G20 nation on climate change performance: RBI chief

“Climate validation of our infrastructure is also a priority,” the governor said. (document)

Cochin, Kerala:

RBI Governor Shakti Kantha said India was “the highest ranked G20 country based on the 2023 Climate Change Performance Index” and “the fifth best performer globally”.

In the RBI governor’s 17th KP Hormis commemorative speech, Shaktikanta Das said on Friday, “Given India is widely expected to remain one of the fastest growing economies in the world, our energy demand is likely to grow exponentially. We The challenge is twofold: one is to meet projected growth in energy demand, and the other is to rapidly transition from fossil fuels to renewables.”

“Given the massive investment in infrastructure in recent years, climate proofing of our infrastructure is also a priority,” the Governor said. “Through global forums such as the Disaster Resilient Infrastructure Coalition (CDRI)4, India is leading the global effort to address these challenges.” efforts,” the RBI governor said.

The Governor stated that the current global crisis is both an opportunity and a major test for the G20, which accounts for 85% of world GDP and 75% of global trade. “Following the East Asian financial crisis in 1997, the G20 was established in 1999 as a forum for finance ministers and central bank governors to discuss global issues and policy options,” he added.

“Following the 2008 global financial crisis, the G20 was upgraded to the level of Heads of State/Government in 2009,” the RBI Governor said, adding, “In an interconnected world, when the nature of the shock, only National policies may not be fully effective to be global and durable.”

“Among the multiple risks facing the international community, soaring inflation poses a complex monetary policy dilemma for each economy, raising interest rates to curb inflation while minimizing sacrifices to growth to avoid Hard impact. Landing.”

Since early 2022, aggressive monetary policy tightening by systemic central banks and the ensuing appreciation of the dollar have left some economies with high external debt ratios highly vulnerable to debt distress, he said.

Regarding recent developments in the U.S. banking system, he said it highlighted the importance of banking regulation. “These areas have significant implications for maintaining financial stability in each country.”

These developments in the U.S., he said, have brought home the importance of ensuring prudent balance sheet management, robust risk management, and sustainable growth in liabilities and assets; conducting regular stress tests; and building capital buffers against any unexpected future stress. “They also point out that cryptocurrencies/assets etc. may pose a real threat to banks, directly or indirectly,” he added.

The Governor said that the RBI has taken necessary steps in all these areas and has appropriately strengthened regulation and supervision of the financial sector and regulated entities.

According to Shaktikanta Das, regulatory measures include the implementation of leverage ratios (June 2019), large risk exposure framework (June 2019), governance guidelines for commercial banks (April 2021), standard asset securitization guidelines (September 2021). Month) ), Size-Based Regulation (SBR) Framework for NBFCs (October 2021), Revised Regulatory Framework for Microfinance (April 2022), Revised Regulatory Framework for Urban Cooperative Banks (UCB) (July 2022) and digital Loan Guide (September 2022) .

According to the governor, the RBI’s regulatory framework has been significantly strengthened in recent years, which includes a unified and coordinated approach to the regulation of commercial banks, non-bank financial companies and urban cooperative banks.

(Aside from the title, this story is unedited by NDTV staff and published via a syndicated feed.)

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