Getting a better sense of climate-related risks and green investments is a central part of global efforts to transition to a low-carbon economy, with countries from Britain to Japan making such disclosures mandatory for financial institutions.
However, since the re-election of US President Donald Trump, the focus on climate risks worldwide has eroded.
The RBI’s proposed norms, which had been under discussion with banks since 2022, would require banks and financial institutions to regularly disclose climate-related risks in their loan portfolios, as well as mitigation strategies and targets.
Under the draft rules published in 2022, they would be introduced on a voluntary basis from the 2027 fiscal year, which starts on April 1.
“The final guidelines are ready. But RBI felt this is not a priority at this time,” said one of the sources, who did not wish to be identified as they were not authorized to speak to the media.
“Additionally, these guidelines could be burdensome and costly for companies if implemented, as many are not required to disclose climate-related risks to business and supply chains,” the source said.
The RBI did not respond to an email seeking comment.
RBI’s decision to wait before issuing final norms for climate disclosure to Indian banks has not been previously reported.
However, the central bank has proposed a set of guidelines for banks and other regulated entities for implementing resolution plans during natural disasters.
REGULATORY MISMATCH
As part of the proposed standards, banks were required to calculate borrowers’ gross emissions and disclose this information by asset class and industry. In addition, lenders were also expected to analyze the impact of adverse climate events on borrowers’ ability to repay loans.
These steps could have led to a rise in the prices of loans to emission-heavy sectors and borrowers in climate-sensitive zones.
If these rules are postponed, banks are likely to maintain the status quo on lending policy, without negative consequences for climate-sensitive borrowers.
Another challenge, according to a second source, was an emerging discrepancy between RBI and Indian market regulator Securities and Exchange Board of India (SEBI), which has delayed disclosure of key suppliers’ climate risks.
“RBI wants banks to disclose climate-related risks in portfolios, but SEBI guidelines do not require companies to make detailed disclosures on how climate risks impact business and supply chains,” the source said.
Alignment is crucial to ensure that banks and companies are on the same page when it comes to climate risk assessments, the source said.
India ranks ninth globally in terms of climate vulnerability, according to the Germanwatch Global Climate Risk Index 2026, which tracked extreme weather events between 1995 and 2024.
During this period, India experienced 430 extreme weather events, resulting in more than 80,000 deaths and economic losses of about $170 billion, exposing lenders to credit risks, the report said.
Published on January 29, 2026
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