MUMBAI: Regulators and policymakers need to perform a “delicate balancing act” to successfully navigate the dual challenges of promoting green finance while managing heightened credit risks arising out of the transition to green technology that could threaten financial stability, M Rajeshwar Rao, deputy governor of RBI said, while speaking on green finance.
“The fact that the net-zero technologies driving the transition to decarbonisation, are at various developmental and evolving stages, itself signifies a significant increase in credit risks. Thus, there is a dichotomy wherein on one hand there is a need for incentivising green and sustainable finance and on the other there is an increase in inherent risks from encouraging such financing,” he warned during his valedictory address at the Credit Summit 2025 in New Delhi.
