Development banks have been identified to play an important role in addressing environmental and climate challenges through financing and other support. Their interventions are critical in transitioning to green. They also play a critical role in driving inclusive finance as well as green finance and for that matter inclusive green finance (IGF). By combining environmental sustainability with financial inclusion, IGF aims to build a resilient, low-carbon economy while ensuring equitable access to the benefits of green transition. IGF and its components (i.e. inclusive finance and green finance) have implications for financial stability. This paper focuses on the role of development banks in dealing with the challenges of climate change and addressing financial exclusion. The paper also examines the relevance of IGF and its implications for financial stability.