RBI Postpones Mandatory Climate Risk Reporting for Banks

The Reserve Bank of India (RBI) has deferred plans to mandate climate risk disclosures by domestic lenders, according to Reuters reports.  

The proposed framework had been discussed with banks since 2022 and was scheduled for voluntary adoption from fiscal year 2027, starting April 1. The central bank did not respond to queries on the status of the guidelines. 

Key Disclosure Requirements in Draft Rules 

The draft norms required banks and financial institutions to disclose climate-related risks in their loan portfolios, along with mitigation measures and targets.  

Lenders were also expected to calculate the gross emissions of borrowers and report the data by asset class and industry. In addition, banks were to analyse how adverse climate events could affect borrowers’ repayment capacity and credit quality. 

Operational and Cost Concerns 

One reason cited for the deferment was the potential burden on corporates and lenders. Many companies are not currently required to disclose climate risks across business operations and supply chains, which could have made compliance complex and costly.  

As per report, officials also indicated that the guidelines were not viewed as an immediate regulatory priority. 

Regulatory Mismatch With SEBI 

Reports highlighted differences between the RBI and the Securities and Exchange Board of India (SEBI) on climate-related disclosures.  

While the RBI sought portfolio-level climate risk reporting from banks, SEBI has pushed back requirements for companies to disclose climate risks, particularly for key suppliers. This divergence limits the availability of consistent data for banks’ risk assessments. 

Global Context and Exposure to Climate Events 

Several countries, including the UK and Japan, have made climate risk disclosures mandatory for financial institutions as part of broader low-carbon transition policies. However, global momentum has softened following political shifts in the United States. 

India ranks ninth globally in climate vulnerability, according to the Germanwatch Global Climate Risk Index 2026. Between 1995 and 2024, India recorded 430 extreme weather events, resulting in over 80,000 deaths and economic losses of about $170 billion, highlighting potential credit risks for lenders exposed to climate-sensitive regions and sectors. 

Read More: Government May Receive ₹3 Lakh Crore RBI Dividend in FY27!  

Conclusion 

The RBI has proposed separate guidelines on resolution planning during natural calamities. The deferment of climate disclosure norms leaves existing credit policies unchanged and underscores ongoing gaps in regulatory alignment. 

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