RBI discussion paper: Banks and financial organizations may consider opening paperless branches

28 Jul 2022 , 01:00 PM

On Wednesday, the Reserve Bank made the suggestion that banks and other financial institutions think about doing away with paper receipts at their branches and implementing electronic receipts at ATMs.

The Reserve Bank of India (RBI) stated in a discussion paper on “Climate Risk and Sustainable Finance” that it plans to develop a strategy based on best practices from around the world for reducing the negative effects of climate change, as well as lessons learned from participation in standard-setting bodies and other international fora.

A wide directive for all RBI Regulated Entities (REs) to have proper governance, a plan to address climate change risks, and a risk management system to efficiently manage them from a macroprudential viewpoint are all part of the approach, it was stated.

Additionally, the central bank has suggested capacity training, voluntary initiatives, and financial disclosure and reporting for REs connected to climate risk.

The REs should voluntarily establish goals for boosting funding for green initiatives over the short, medium, and long term in relation to specifically selected sectors.

Till September 30, RBI is accepting views on the discussion paper.

The discussion paper stated: “REs could consider converting their branches to green branches by minimizing the usage of paper in their operations and introducing the option of e-receipts at their ATMs in order to green the banking processes by making them more environmentally friendly.”

The discussion paper states that the REs may consider strategies to encourage the adoption of e-receipts.

Additionally, it was stated that the REs may wish to convert all of their data centres to green data centres by switching to renewable energy as a source of electricity for the facilities and putting into practice recommendations made by recognized frameworks like the Green Data Centre Rating Systems.

The RBI also stated in the discussion paper that there is a growing need to educate the Indian financial sector about the value and advantages of green finance, placing a particular focus on building capacity and raising awareness of climate risk and sustainable finance to address the problems caused by climate change.

The discussion paper also advised that the Indian Banks’ Association (IBA) establish a working group on capacity building in the fields of climate risk and sustainable finance to meet the capacity building needs.

It went on to say that the board of directors of the REs would be crucial in identifying environmental and climate-related risks as well as opportunities and evaluating the current and possible effects of these risks on their strategy and objectives.