India has committed to becoming a net-zero economy by 2070. This means a five fold increase in investment in green energy by 2030. But Indian banks are already heavy lenders to the power sector.
In this report the authors quantify the extent of lending by Indian banks to fossil fuel assets including power stations, coal, oil and gas extraction and heavy industry. This loans pose potential risks to Indian financial systems capacity to transition to decarbonise.
The report examines the Reserve Bank of India’s approach to managing climate transition risks. It reviews examples and case studies from other central banks and the Network for the Greening Financial System (NGFS) about how they may green their operations. The authors develop a suite of options for the RBI to consider.
