Sustainable finance panel moots promoting regulatory sandbox for green fintech

The committee, headed by CK Mishra, former secretary, ministry of environment, forest and climate change, submitted its final report to chairperson, IFSCA on 3 October, IFSCA said in a statement.

The focus areas of the committee were directed towards aligning the IFSC regulations with the international best practices, exploring ways in which capital flows through IFSC can be enhanced and also support development of innovative financial products in the area of green and sustainable finance.

The committee has provided its recommendation on various aspects of sustainable finance including products, policies and regulations, capacity building and outreach initiatives related to green and sustainable finance, the statement reads.

Some important recommendations include developing a voluntary carbon market, framework for transition bonds, enabling de-risking mechanisms, promoting regulatory sandbox for green fintech and facilitating the creation of a global climate alliance among others, it added.

Considering the significance of the MSME sector in the economic development of the country, the committee also proposed setting up of a dedicated MSME platform for sustainable lending.

It also recommended to facilitate the use of innovative instruments such as catastrophe bonds, municipal bonds, green securitisation, blended finance among others, the press release further said.

Focusing on the need to enhance capital flows in IFSC, the committee endorses the need to enable aggregation facilities, impact funds, green equity etc. in IFSC. In addition, it recommends IFSCA to play a vital role in capacity building which lays the foundation for greening the financial system.