RBI Charts Path for Green and Sustainable Finance in India

The Reserve Bank of India has reaffirmed its commitment to fostering a robust ecosystem for green and sustainable finance. In his valedictory address at Credit Summit 2025, Deputy Governor M. Rajeshwar Rao outlined key strategies to integrate sustainability into India's financial framework.  

 

Rao emphasized the need for financial institutions to align with global climate goals while ensuring economic stability. He highlighted the importance of green bonds, sustainable lending practices, and regulatory frameworks that encourage responsible investment.  

 

The speech also underscored India's vulnerability to climate change and the financial sector's role in mitigating risks. Rao stressed that banks and financial entities must proactively support climate adaptation measures, including financing renewable energy projects and sustainable infrastructure.  

 

Industry experts view the RBI's stance as a significant step toward mainstreaming green finance in India. The focus on regulatory clarity and financial incentives is expected to drive greater participation from investors and institutions.  

 

Key Highlights of RBI's Green Finance Strategy  

 

- Emphasis on integrating sustainability into India's financial system through policy and regulation.  

- Promotion of green bonds and sustainable lending to support climate-friendly investments.  

- Recognition of climate risks and the financial sector's role in adaptation and mitigation.  

- Encouragement for banks to finance renewable energy and sustainable infrastructure projects.  

- Industry experts anticipate increased investor participation in green finance initiatives.  

 

Sources: Reserve Bank of India, Business Standard, Economic Times, Moneycontrol, Investing.com