Mumbai, Nov 7 (PTI Regulators and the government should work together in developing a comprehensive and consistent framework to identify, assess and monitor systemic climatic financial risk and adaptation
measures, IRDAI Chairman Ajay Seth said on Friday.
Speaking at the 10th edition of the corporate governance summit, "Gatekeepers of Governance", here, the insurance regulator chief also said draft strategy on the financial sector-specific cyber security is expected to be with IRDAI by the early part of 2026.
The prime example of emerging challenges of the interlinked financial sector could be found in the efforts of public authorities in formulating coordinated strategies on strengthening cyber security in the financial sector and climate risk resilience, he said.
"As regards climate risk resilience, all the regulators and the government should work together in developing a comprehensive and consistent framework to identify, assess and monitor systemic climatic financial risk and adaptation measures," Seth said at the session titled "Regulatory Gaps and Overlaps: Do They Exist".
Noting that the leader is fairly important or rather centerpiece for the developed economy, he said the objective should be to ensure that effective management of climate-related risk and opportunities should promote long-term financial stability without compromising on the nation's development aspirations and priorities.
"Here, at the same time, regulations may have to move in tandem with and not being ahead of the policy," the Insurance Regulatory and Development Authority of India (IRDAI) Chairman emphasised.
As regards increasing interlinking of different segments of the financial sector, there have been many instances in the recent past, domestically and globally, where the functioning or disruption in one segment of the financial sector has resulted in financial distress and instability in other segments or even overall financial instability, Seth said.
"Here, within the country, the ILFS default crisis in 2018 led to severe disruption in functioning of the corporate bond markets requiring several liquidity support measures by the government, RBI, SEBI in a coordinated strategy to strengthen the financial stability," he said.
Seth said that the Financial Stability Assessment Report of 2025 by IMF and World Bank has acknowledged that Indian authorities have advanced cyber security risk oversight especially for banks but has recommended that extensive cyber security crisis simulations and stress tests for banks could be expended for cross-sectoral and market-wide events.
It is encouraging to note that in the context of FSDC's work in the 29th meeting in June this year, the Council has considered strengthening the cyber resilience framework of the Indian financial sector through a financial sector specific cyber security strategy.
"Currently the work (on the strategy) is on and we expect that early part of the next calendar year that the draft strategy should be with us," Seth stated. PTI IAS HVA
