RBI Deputy Governor on Green Finance Challenges

MUMBAI: In a recent address at the Credit Summit 2025 in New Delhi, M Rajeshwar Rao, deputy governor of the Reserve Bank of India (RBI), emphasized the need for a "delicate balancing act" by regulators and policymakers. This balance is crucial to navigate the dual challenges of promoting green finance while managing the heightened credit risks associated with the transition to green technology.

The deputy governor pointed out that the evolving nature of net-zero technologies introduces significant credit risks. "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.

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