Michael Debabrata Patra, Deputy Governor, Reserve Bank of India stated recently that evolution of the deposit insurance function is likely to confront more complex challenges amidst heightened uncertainty. For instance, climate change is emerging as an overarching risk to the global economy and financial systems. He noted that according to the IADIs surveys, 60 per cent of DIs have formalised Environmental, Social, and Governance (ESG) policies and some are members of the Network for Greening the Financial System (NGFS). The central bank is exploring appropriate coverage for green deposits, climate risk based differential premiums and ex ante funding needs for climate sustainability. These new challenges will inevitably require effective coordination and information sharing between DIs and other national safety net participants as well as with those in other jurisdictions.
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