Sustainable finance panel considers promoting regulatory sandbox for green fintech

IFSCA said in a statement that the committee, headed by CK Mishra, former secretary, Ministry of Environment, Forest and Climate Change, submitted its final report to the chairman of IFSCA on October 3.

The focus areas of the committee were directed to align IFSC regulations with international best practices, explore ways to increase capital flows through IFSC, and support the development of innovative financial products in the area of ​​green and sustainable finance was.

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

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

Keeping in view the importance 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.

The press release further said that it also recommended facilitating the use of innovative instruments such as disaster bonds, municipal bonds, green securitization, blended finance.

Focusing on the need to increase capital flows into IFSC, the Committee supports the need to enable aggregation facilities, impact funds, green equity, etc. in IFSC. Further, it recommends IFSCA to play an important role in capacity building which lays the foundation for greening the financial system.