RBI Governor Sanjay Malhotra said that India has taken the lead in providing finance to renewable energy projects by including them in ‘priority sector lending’ to accelerate the country’s transition to a low carbon economy in the fight against climate change.
Addressing a policy seminar on Climate Change Risks and Finance in New Delhi yesterday, the Reserve Bank of India Governor said that Central Banks in Advanced Economies have traditionally followed an asset neutral approach, on the other hand Central Banks in emerging markets and developing economies have adopted directed lending policies to channelise credit to certain sectors of their economies given their individual country circumstances and developmental objectives.
He highlighted that India’s priority sector lending guidelines facilitate credit to be channelled to renewable energy projects – solar, biomass based, windmills, micro-hydel plants and non-conventional energy based public utilities viz. street lighting systems, and remote village electrification projects as part of priority sector lending.
