Climate change is widely discussed as a prominent risk aspect which can pose financial risks to financial entities. The risks may range from physical risks and transition risks and impact can be evident across all the global economies. In India, the banking sector is the most important component of its financial system and is entrusted with managing various financial risks and mobilizing funds for sustainable development. The timely guidance of the Reserve Bank of India (the apex regulatory body) has made Indian Banks factor in climate risk factor into their internal control, risk assessment and disclosure processes. This chapter examines the changing role of risk management practices in Indian Banking Sector, where climate change also has a key role now. This study also focusses on new policies, practices and response of individual banks. The large banks of India have set a path of climate risk management by starting a separate ESG and Climate Finance Unit, laying down an ESG financing framework, and adding climate scenario analysis in its risk assessment. Banks such as HDFC Bank, Yes Bank, Kotak Mahindra Bank, and Federal Bank have also advanced through financed emissions reporting, net-zero commitments, climate stress tests, and coal policy exclusions. In spite of these steps, the overall preparedness of the Indian banking sector is still limited, with most institutions still in the process of defining climate risk strategies. The key issues are availability of data, absence of uniform ESG metrics, and dearth of internal expertise. Institutional responses are compared and explained in this chapter and policy gaps that must be addressed in the short run. Through the presentation of regulatory changes and best practices, it emphasizes the importance of Indian banks moving away from reaction-driven risk management to proactive climate leadership and thus contributing to India’s larger environmental and economic objectives.