Page 8 - Banking Finance September 2022

RBI CORNER

Reserve Bank

RBI's March financial in- are computed based on a number of RBI to banks: Have policy
indicators.
clusion index shows for reducing climate risks
growth in all segments RBI launches awareness Most banks have decided to gradually
reduce their exposure to high carbon-
The Reserve Bank of India's financial drive as unclaimed depos-
emitting businesses in the coming
inclusion (FI) index, which was con-
its increase years, according to a survey by the
structed to capture the extent of finan-
Reserve Bank of India (RBI).
The amount of unclaimed deposits is on
cial inclusion across the country, has
the rise despite repeated public
risen to 56.4 in March 2022, showing Banks would, however, need to align
awareness campaigns undertaken by
growth across all parameters. The in- their climate-related financial disclo-
dex stood at 53.9 as of March 2021. the Reserve Bank of India (RBI) and sures with an internationally accepted
the banks. framework to improve the comparabil-
"The value of the FI Index for March
ity and consistency of the revelations
2022 stands at 56.4 vis-à-vis 53.9 in RBI is now encouraging people who
with their counterparts globally, the
March 2021, with growth witnessed have not claimed their deposits to
RBI said.
across all the sub-indices", the central reach out to the respective banks for
bank said in a statement. such deposits. Unclaimed deposits are The central bank called for a board-
on the rise mainly due to non-closure approved policy on climate risk man-
The FI index was conceptualised as a
of savings / current accounts which agement. According to the RBI's dis-
comprehensive index incorporating
depositors do not intend to operate cussion paper, such a policy was
details of banking, investments, insur-
anymore; due to not submitting re- needed as current board-level engage-
ance, postal as well as the pension sec-
demption claims with banks for ma- ment on climate risk is inadequate.
tor in consultation with the govern-
tured fixed deposits; or nominees/ le-
ment and respective sectoral regula- Also, in a third of banks, responsibility
gal heirs of deceased depositors do not for overseeing climate initiatives was
tors in August last year.
come forward to make a claim. yet to be assigned. Only a few banks
The FI-Index has been constructed
included climate risk, environment and
without any 'base year', and is pub- RBI defines unclaimed deposits as bal-
sustainability among the key perfor-
lished in July every year. The FI-Index ance in savings, current accounts, or
mance indicators of top management.
comprises three broad parameters: term deposits which are not claimed
access, with a weightage of 35 per for within ten years from date of ma- The RBI's discussion paper calls for the
cent; usage with 45 per cent turity. These amounts are transferred board to play a critical role in identify-
weightage; and quality with 20 per by banks to "Depositor Education and ing climaterelated risks and opportuni-
cent weightage with each of these Awareness" (DEA) Fund maintained by ties. The central bank also called for
consisting of various dimensions, which RBI. lenders to assess the financial risks aris-
8 | 2022 | SEPTEMBER | BANKING FINANCE