Reserve Bank of India (RBI) released Draft Disclosure Framework on Climate-related Financial Risks, 2024 | Current Affairs | Vision IAS
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    Reserve Bank of India (RBI) released Draft Disclosure Framework on Climate-related Financial Risks, 2024

    Posted 01 Mar 2024

    Updated 27 Mar 2024

    2 min read

    • RBI has issued these guidelines in the exercise of the powers conferred by the Banking Regulation Act, of 1949.
    • Climate-related financial risks means the potential risks that may arise from climate change or from efforts to mitigate climate change, their related impacts, and economic and financial consequences.

     

    • Need of Disclosure
      • Climate-related risks are one of the emerging risks. 
      • Helping various stakeholders (like customers and depositors) understand the risks an organization faces.
      • Foster an early assessment of risks and opportunities and also facilitate market discipline.

     

    • Applicability:  to the following entities, collectively referred to as Regulated Entities(RE’s)
      • All Scheduled Commercial Banks (excluding Local Area Banks, Payments Banks, and Regional Rural Banks)
      • All Tier-IV Primary (Urban) Co-operative Banks.
      • All All-India Financial Institutions
      • Large Non-Banking Financial Companies.

     

    • RE’s will be required to make disclosures on four thematic areas (Pillars): 
    GovernanceGovernance processes, controls, and procedures used by the RE’s to identify, climate-related financial risks and opportunities.
    StrategyStrategy for managing climate-related financial risks and opportunities
    Risk ManagementProcesses to identify, assess, prioritize, and monitor climate-related financial risks and opportunities
    Metrics and TargetsPerformance concerning RE’s climate-related financial risks and opportunities
    • Tags :
    • RBI
    • Climate-related Financial Risks
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