The Sustainable Economy Panel promotes regulatory sandbox for green fintech

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

The focus areas of the committee were aimed at aligning the IFSC regulations with international best practice, exploring ways in which capital flows through the IFSC can be improved and also supporting the development of innovative financial products in the area of ​​green and sustainable finance.

The committee has given its recommendation on various aspects of sustainable finance, including products, guidelines and regulations, capacity building and outreach related to green and sustainable finance, the statement says.

Some key recommendations include developing a voluntary carbon market, transitional bond framework, enabling risk-free mechanisms, promoting regulatory sandbox for green fintech and facilitating the establishment of a global climate alliance among others, it added.

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

It also recommended facilitating the use of innovative instruments such as disaster bonds, municipal bonds, green securitization, mixed finance, among others, the press release states.

Focusing on the need to increase capital flows in the IFSC, the committee supports the need to enable aggregation facilities, impact funds, green stocks etc. in the IFSC. In addition, it recommends the IFSCA to play an important role in capacity building that lays the foundation for greening the financial system.