RBI to finalise rules mandating banks to disclose climate risks in loans, countering the global trend of diluted climate commitments.

• Disclosure norms are voluntary from FY27, mandatory from FY28; banks must report emissions, climate risks, and mitigation plans.
• Banks to conduct climate stress tests; assess impact of floods, cyclones, and heatwaves on borrowers and the economy.
• RBI’s move contrasts with US banks’ pullback, aligns India with the UK, Japan in targeting a low-carbon financial sector transition.