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A project report
On
Financial literacy
FOR
RESERVE BANK OF INDIA
Bhubaneswar
BYBY
PADMINI PRIYADARSHINI MISHRAPADMINI PRIYADARSHINI MISHRA
IN PARTIAL FULFILLMENT OFIN PARTIAL FULFILLMENT OF
MASTER OF FINANCE AND CONTROLMASTER OF FINANCE AND CONTROL
ASMIT, BBSRASMIT, BBSR
External guide Internalguide
Mr.P.K.Jena Mrs.Anamika PattnaikDGM financefaculty Reserve Bank of Indiaasmit
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acknowledgement
A Summer project is a golden opportunity for learning and self
development. I consider myself very lucky and honoured to have so many
people lead me through in completion of this project.
My grateful thanks to Mr.P.K.Jena, DGM, RBI, who in spite ofbeing extraordinary busy with his duties, took time out to hear, guide, and
keep me on the correct path. A humble Thank you Sir.
The study could not have been done without the support of
Dr.A.K.Mohapatro, AGM, RBI. My deep sense of gratitude to
Mr.M.Chandrasekharan, DGM, RBI. I would also like to thank Mr. Sridhar
Behera, Assistant Manager for providing necessary material and shaping
the course to its successful completion.
Thanks and appreciation to the helpful people at RBI, for their
support.
Mrs Anamika Pattnaik, Faculty of Finance whose patience I have
probably tested to the limit. She was always so involved in the entire
process, shared her knowledge and encouraged me to think. Thank you,
Dear Madam. I would also like to thank our Institution (ASMIT) for
helping me to get such an excellent opportunity.
Last but not the least, there were so many people who shared valuable
information that helped me in successful completion of this project.
Date: PadminiPriyadarshini Mishra
Place: Bhubaneswar Summertrainee 2010
DeclarationReserve Bank of India 2
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I hereby declare that the project work entitled Financial literacy
submitted to the Utkal University is a record of an original work done by
me under the guidance of Mr.P.K.Jena, DGM, Reserve Bank of India, Mrs.
Anamika Pattnaik, Finance Faculty of Arya School Of Management and
IT. This project work has not formed the basis for the award of any degreeor diploma/ associateship /fellowship and similar project, if any.
Date PadminiPriyadarshini Mishra
Place:Bhubaneswar Roll No:
13767U0930
CONTENT
CHAPTER:1 6-14
(a) Preface 7(b) Introduction- 9(c) Objective - 12
(d) Methodology - 12
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(e) Limitation - 14CHAPTER: 2..15 -18
Central Bank Profile -17-18
CHAPTER: 3..19
58(a) Financial Education - 20(b) Financial literacy as a means
to financial inclusion- 22(c) Importance - 23(d) Financial Literacy: An Intern-
-ational context 26(e) OECD 29(f) Financial literacy: Indian context 30(g)Need
32(h)Challenges 34(i) Possible Themes 35(j) Issues
36(k)Scope
37(l)Initiative taken by RBI 39(m) Initiative taken by GOVT 57
CHAPTER:4 59-71 Data analysis and interpretationCHAPTER : 572-
77(a) Findings 73(b) Suggestion 75(c) Conclusion 77
CHAPTER :6.79- 83
Bibliography 80Reference 81
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Appendix 82
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preface
Inclusive growth:Indias post 1990s economic growth has made it one of the worlds fastest
growing economies in the world. Its GDP growth rates of up to about 9%
in the last few years are historically unparalleled except by the
neighbouring China. With the rapid growth rates, however, come new
challenges and new questions. One such challenging question concerns the
spread of the benefits of growth across different segments of society.
To ensure that growth has been well distributed, Indias PlanningCommission has made Inclusive Growth the explicit goal in the Eleventh
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five-year plan. The concept of Inclusive Growth has dominated discussions
across India.
Inclusive growth implies an equitable allocation of resources with
benefits accruing to every section of society. It is the indisputable way to
reform the regional imbalances and strengthen the economic gains. It is
otherwise called as Broad-based growth, Shared growth and Pro-poorgrowth. The major objective of inclusive growth is to ensure that the
benefits and fruits of growth reach to the bottom of pyramid. Inclusive
growth can be achieved, inter alia, through financial inclusion.
FINANCIAL INCLUSION:
Financial inclusion is delivery of banking services at an affordable cost to
the vast section of disadvantaged and low income groups. The various
services include savings, loans, insurance, remittance facilities and
financial counselling, advisory services by the formal financial system. It
is the process of ensuring access to financial services and timely adequate
credit needed by vulnerable groups such as weaker sections and low
income groups at an affordable cost (Rangarajan Committee on Financial
Inclusion).
Financial literacyplays a very crucial role inachievement of 100 per cent financial inclusion. It helps in developing
personal financial management skills and financial operational skill to
make financial inclusion successful.
Lower income groups or the poor people depend upon the
informal financial sources i.e. private money lenders for their financial
needs. Different types of risk are always associated with their lives likedeath, accident, sickness or natural disaster like flood, cyclone, fire etc.
They need to be protected from the above risks .They also want to save
in order to meet their future needs. But they were unable to do so
because of lack of awareness about financial products and services.
Also their unsound financial position obstructs the way. It is the
financial literacy which would generate awareness amongst different
population groups.
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Financial literacy plays a significant role in effective allocation of
household savings and ability of individuals to meet their financial goals. It
also means the ability to seek sound financial advice. In India the need for
financial literacy is even greater considering the low levels of literacy and
the large section of the population, which still remains out of formal
financial set-up.
For sustaining financial inclusion, the financial literacy becomes avery critical component. Research findings revealed that the low level of
financial literacy is one of the reasons why the financial inclusion drive has
not picked up. While ensuring that the entire unbanked population of India
becomes financially literate seems like a formidable task, ensuring that the
unbanked population hears about the drive, the benefits of a savings
account and how to use one seems much more achievable. Similarly,
studies have shown that how accounts opened through the BC model are
not being used, after account opening. Certainly, innovative forms ofmarketing which explain the product in simple terms so that target account
holders understand the account and its benefits should go a long way.
Credit Counselling Centres:
The RBI has asked both the private as well as public sector banks to set up
more financial literacy and credit counselling centres in every district and
has suggested the lead banks to hold a public meeting every quarter in each
district to address grievances of the bank customers. These centres should
provide both pre and post counselling.
The counselling centres should have the facility for online submission
of applications, which may be forwarded to branches. Quality of services
is an important aspect and also having a system of accreditation of
counsellors. While the financial literacy and credit counselling centres
would provide financial literacy and credit counselling, the activities of
rural development and self employment training institutes (RUDSETI)
towards skill development\capacity building could be dovetailed withFLCCs initiatives, for increasing the earning / debt repaying ability of the
distress borrowers families.
While credit counselling services may be provided by banks both in
rural and urban area, it is observed that a large section of Indian population
is resident in rural areas with literacy level lower than in urban areas. The
rural population is also mere dependent on the informal sector for its
financial needs. It is necessary that a segmented approach, rather than
broad based generalized approach to counselling for all type of borrowers,
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is adopted. The centres in rural areas could concentrate on financial
literacy and credit counselling for farming communities and those engaged
in allied activities. The centres in urban areas could focus on individuals
with overdue in credit cards, personal loan, housing loans etc.
A great deal of emphasis needs to be given by all the institution to
educate the public of the various schemes / facilities. All forms of publicitylike press conference, workshops, publications, websites, road shows,
mobile units, village fair should be actively explored. A suitable budget
needs to be provided by all banks for the purpose. In order to go ahead in a
planned manner, a High Level Council on financial literacy and
counselling may be setup with the members from Reserve Bank,
NABARD, IBA, BCSBI , CIBIL, NGOs working in the area and consumer
organizations; this will foster greater collaboration in the areas relating to
consumer education and protection of consumers interest.
Various steps taken:
Mobile Literacy Vans: The vehicles are intended to take the rural and
semi-urban branches to village door steps and remote areas. Doorstep
counselling and guidance is through the educative material and pamphlets
to create awareness among the remote rural masses about bank schemes
and banking facilities.
Utilizing NGOs: As recommended by the working groups on
rehabilitation of Sick SMEs (Chairman: Dr. K. C. Chakarabarthy, April
2008), a scheme for utilizing specified NGOs for providing the following
services
Training in basic accounting principles and credit management
Training on marketing, technology, design development, packaging,
quality control etc.
Creation and development of institutions borrowers like cooperative
Participation in exhibitions and marketing fairs.
Development of common facilities for a group
Providing financial assistance for infrastructure creation
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Methodology
The objective of this project is to do make various target groups financially
literate, developing personal financial management skill and financial
operation skill.
INFORMATION SOURCES
PRIMARY DATA SOURCES:
Reserve Bank of India website various speeches, bulletins etc.
Interview of 50 sample population
SECONDARY DATA SOURCES:
Books:
Improving Financial literacy- OECD Publishing Speeding of financial inclusion- Sameer Koucher
www.rbi.org.in
www.google.co.in
en.wikipedia.org
various articles on financial literacy
DATA COLLECTION TOOLS
Discussions with various agencies promoting financial literacy campaign
and various target groups (school and college going children, women, rural
and urban poor defence personnel and senior citizen). Questionnaires were
used to record data.
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India Act, 1934.The Central Office of the Reserve Bank wasinitially established in Calcutta but was permanently movedto Mumbai in 1937. The Central Office is where theGovernor sits and where policies are formulated. Thoughoriginally privately owned, since nationalisation in 1949,the Reserve Bank is fully owned by the Government of
India.
The Preamble of the Reserve Bank of India describes thebasic functions of the Reserve Bank as:"...to regulate theissue of Bank Notes and keeping of reserves with a view tosecuring monetary stability in India and generally tooperate the currency and credit system of the country to itsadvantage."
The Reserve Bank of India is the central bank of the countryentrusted with monetary stability, the management ofcurrency and the supervision of the financial as well as thepayments system. Established in 1935, its functions andfocus have evolved in response to the changing economicenvironment. Its history is not only intrinsically interwovenwith the economic and financial history of the country, but
also gives insights into the thought processes that havehelped shape the country's economic policies. Some facetsof the Bank's history for the laypersons are as follows:
The Reserve Bank of India is the central bank of thecountry. Central banks are a relatively recent innovationand most central banks, as we know them today, wereestablished around the early twentieth century. TheReserve Bank of India was set up on the basis of therecommendations of the Hilton Young Commission. TheReserve Bank of India Act, 1934 (II of 1934) provides thestatutory basis of the functioning of the Bank, whichcommenced operations on April 1, 1935.The Bank began itsoperations by taking over from the Government thefunctions so far being performed by the Controller ofCurrency and from the Imperial Bank of India, themanagement of Government accounts and public debt. Thecurrency offices at Calcutta, Bombay, Madras, Rangoon,
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Karachi, Lahore and Cawnpore (Kanpur) became branchesof the Issue Department. Offices of the BankingDepartment were established in Calcutta, Bombay, Madras,Delhi and Rangoon. Burma (Myanmar) seceded from theIndian Union in 1937 but the Reserve Bank continued to actas the Central Bank for Burma till Japanese Occupation of
Burma and later up to April, 1947. After the partition ofIndia, the Reserve Bank served as the central bank ofPakistan up to June 1948 when the State Bank of Pakistancommenced operations. The Bank, which was originally setup as a shareholder's bank, was nationalised in 1949.Aninteresting feature of the Reserve Bank of India was that atits very inception, the Bank was seen as playing a specialrole in the context of development, especially Agriculture.
When India commenced its plan endeavours, thedevelopment role of the Bank came into focus, especially inthe sixties when the Reserve Bank, in many ways,pioneered the concept and practise of using finance to
catalyse development. The Bank was also instrumental ininstitutional development and helped set up institutions likethe Deposit Insurance and Credit Guarantee Corporation ofIndia, the Unit Trust of India, the Industrial DevelopmentBank of India, the National Bank of Agriculture and RuralDevelopment, the Discount and Finance House of India etc.to build the financial infrastructure of the country. With
liberalisation, the Bank's focus has shifted back to corecentral banking functions like Monetary Policy, BankSupervision and Regulation, and Overseeing the PaymentsSystem and onto developing the financial markets.
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Financial EducationOrganization for Economic Co-operation and Development, financial
education is the process by which financial consumers /investors improve
their understanding of financial products, concepts and risks and through
information, instruction and/ or objective advice, develop the skills andconfidence to become more aware of financial risks and opportunities, to
make informed choices, to know where to go for help and to take other
effective actions to improve their financial well being.
The focus of any discussion on financial education is primarily on the
individual, who usually has limited resources and skills to appreciate the
complexities of financial dealings with financial intermediaries on matters
relating to personal finance on a day-to-day basis. The process of
economic reforms have educating and empowering the common person to
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participate in the financial marketplace with knowledge and confidence, as
a critical component of public policy.
The need for financial education is felt in the developed and the
developing countries alike. In the developed countries, the increasing
number and complexity of financial products, the continuing shift in
responsibility for providing social security from governments and financialinstitutions to individuals, and the growing importance of individual
retirement planning make it imperative that financial education be
provided to all.
In the developing countries also, the increasing participation of a growing
number of consumers in newly developing financial markets necessitates
the provision of financial education if these markets are to expand and
operate efficiently. In addition, the substantial growth of international
transactions during the last decade, resulting from new technologies and
the growing international mobility of individuals, makes the improvement
in financial education, increasingly, an international concern.
From a regulatory perspective, financial education empowers the common
person and thus reduces the burden of protecting the common person from
the elements of market failure, attributable to, de facto, information
asymmetries. For example, the emphasis on market discipline, as one of
the three pillars of banking regulation, especially under Basel II, is bestserved by participation of financially literate bank customers in the
financial marketplace.
Financial education can make a difference not only in the quality of life
that individuals can afford, but also the integrity and quality of markets. It
can provide individuals with basic tools for budgeting, help them to
acquire the discipline to save and thus, ensure that they can enjoy a
dignified life after retirement. Financially educated consumers, in turn, can benefit the economy by encouraging genuine competition, forcing the
service providers to innovate and improve their levels of efficiency.
Todays complex financial services market offers consumers a vast array
of products and providers to meet their financial needs. This degree of
choice requires that consumers be equipped with the knowledge and skills
to evaluate the options and identify those that best suit their needs and
circumstances. This is especially true for populations that have
traditionally been underserved by our financial system. Financial education
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is also essential to help consumers understand how to prevent becoming
involved in transactions that are financially destructive.
Financial literacy is considered an important adjunct for promoting
financial inclusion and ultimately financial stability. Both developed and
developing countries, therefore, are focusing on programmes for financial
literacy/education.
In India, the need for financial literacy is even greater considering the low
levels of literacy and the large section of the population, which still
remains out of the formal financial set-up. In the context of 'financial
inclusion', the scope of financial literacy is relatively broader and it
acquires greater significance since it could be an important factor in the
very access of such excluded groups to finance. Further, the process of
educating may invariably involve addressing deep entrenched behavioural
and psychological factors that could be major barriers.
In countries with diverse social and economic profile like India,
financial literacy is particularly relevant for people who are resource-
poor and who operate at the margin and are vulnerable to persistent
downward financial pressures. With no established banking
relationship, the un-banked poor are pushed towards expensive
alternatives. The challenges of household cash management under
difficult circumstances with few resources to fall back on, could be
accentuated by the lack of skills or knowledge to make well informed
financial decisions. Financial literacy can help them prepare ahead of
time for life cycle needs and deal with unexpected emergencies without
assuming unnecessary debt.
Financial literacy as a meansto financial inclusion
Basically financial inclusion is the demand side and financial education is
the supply side. When the awareness for financial education will be created
among the people then they can be financially included. It can be better
understandable by the help of a diagram.
Y
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everyone participates in wealth, both in its creation and distribution. Along
with good employment prospects, financial education can play a key role
in helping individuals and families build their assets.
Just as health education in primary and secondary schools helps children
develop good life-long dietary and hygiene habits, good financial
education can provide them with the skills and habits necessary to enablethem to participate sensibly in financial markets. Moreover, well-informed
financial consumers ultimately lead to better financial markets, where
rogue products are forced from the market-place and confidence is raised.
To conclude, financial education has a role to play in so many critical areas
of everyday life:
Financing home ownership; Financing higher education; Financing retirement security;
Making people more astute when saving and investing
Protecting individuals from those who prey upon the ignorance and
greed of the unwary.
Financial literacy: An InternationalExperience
It has been said particularly in the context of the developed economies thatwhile the young do not save enough and do not fully understand the need for
investments for future, many of the elderly tend to feel the pinch of poverty. In
this background, priority needs to be accorded to financial literacy.
An international OECD study was published in late 2005 analyzing
financial literacy surveys in OECD countries. A selection of findingsincluded:
In Australia, 67 per cent of respondents indicated that they understood
the concept of compound interest, yet when they were asked to solve a
problem using the concept only 28 per cent had a good level of
understanding.
A British survey found that consumers do not actively seek out financialinformation. The information they do receive is acquired by chance, for
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example, by picking up a pamphlet at a bank or having a chance talk with a
bank employee.
A Canadian survey found that respondents considered choosing the right
investments to be more stressful than going to the dentist.
A survey of Korean high-school students showed that they had failing
scores - that is, they answered fewer than 60 per cent of the questions
correctly - on tests designed to measure their ability to choose and manage
a credit card, their knowledge about saving and investing for retirement,
and their awareness of risk and the importance of insuring against it.
A survey in the US found that four out of ten American workers are not
saving for retirement.
In Israel, a study is underway into current financial literacy
So for solving these problems different countries have taken important
decisions and opened many institutions. Such of the examples are :-
U.K
In the UK, the Financial Services Authority (FSA) has launched the
biggest ever campaign to improve the financial skills of the population and
imparting education to enable a better appreciation of the risks and rewardsinherent in financial instruments.
U.S.
The US Treasury established its Office of Financial Education in 2002.
The Office works to promote access to the financial literacy tools that can
help all US citizens make wiser choices in all areas of personal financialmanagement, with a special emphasis on saving, credit management, home
ownership and retirement planning. The Financial Literacy and Education
Commission (FLEC),established by the Congress in 2003 through the
passage of the Financial Literacy and Education Improvement Act, was
created with the purpose of improving the financial literacy and education
of persons in the United States through development of a national strategy
to promote financial literacy and education. The Federal Reserve, along
with numerous other federal Government agencies, is a member of thiscommission, which is supported by the Office of Financial Education.
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and complaints. These initiatives have been reinforced by high levels of
transparency and disclosure.
Organisation for Economic Co-operation and Development
Above all, The Organization for Economic Co-operation and Development(OECD) has been taking a pro-active initiative in generating awareness
about financial literacy. It has recently released a major international study
on financial literacy titled 'Improving Financial Literacy' encompassing
practical guidelines on good practices in financial literacy and awareness.
These guidelines, in the form of a non-binding recommendation, are
designed to help countries devise and implement effective financial
literacy programmes, drawing from the best practices in this area in OECD
countries.
They promote the role of all the main stakeholders in financial literacy:
governments, financial institutions, employers, trade unions and consumer
groups. In addition, they also draw a clear distinction between public
information provided by the government and regulatory authorities, and
that supplied by the financial analysts.
It is also important to devise ways to ascertain whether financial literacyhas achieved its objective, such as generating increased consumer
awareness or a changed behaviour. The balance of evidence, however,
suggests that such programmes tend to be effective. For instance, in the
United States, it has been observed that workers increase their participation
in retirement savings plans funded by employee and employer
contributions when the latter offers financial literacy programmes, whether
in the form of brochures or seminars. Consumers who attend one-on-one
counselling sessions on their personal finances have fewer delinquencies.
FINANCIAL LITERACY: AN INDIANContext
Prior to the initiation of financial sector reforms in the early 1990s, the
Indian financial system essentially catered to the needs of planned
development. Customers had little choice in financial instruments. The
segmented and underdeveloped financial markets meant that their exposure
to risk was also limited. In such a situation, customers could employ theirbasic skills to investing simple financial products with assured returns,
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and multiplies the opportunities for them to consume, save, or invest.
Having these basic financial planning skills can help families to meet their
near-term obligations and maximise their longer-term financial well-being.
Financial literacy is also an integral component of customer protection.
Despite concerted efforts, the current state of transparency coupled with
the difficulty of consumers in identifying and understanding the fine printfrom the large volume of convoluted information, leads to an information
asymmetry between the financial intermediary and the customer. For
example, customers are often penalised for minor violations in repayments,
although they have limited redressal mechanisms to rectify deficiencies in
service by banks, rendering the banker-customer relationship one of
unequal. In this relationship, it is the principal, that is, the depositor, who is
actually far less powerful than the agent, that is, the bank. The
representations received in regard to levying of unreasonably high serviceor user charges and enhancement of user charges without proper and prior
intimation, and the growing number of customer complaints against the
banks, also testify to this fact. In this context, financial literacy may help to
prevent vulnerable consumers from falling prey to financially disquieting
credit arrangements.
Need of Financial Literacy in India
As per a comprehensive survey of over 63,000 Indian households to
understand how India earns, spends and saves:
A rural households total annual expenditure, including both routine and
unusual expenditure, amounts to Rs 41,000, resulting in a surplus income
of roughly about Rs 11,000. An urban household in contrast has a surplus
income of Rs 25,000. The survey also highlights disparities in saving
habits. Levels of income, expenditure and saving related behaviour are
linked to the age, education levels and type of engagement of chief earner.
Salary and wage earners account for a low share of the total households
(18.4%) but highest share of the total earnings (30.8%) with an annual
income of Rs 109,000. After taking care of total expenses of Rs 76,000,
these households have surplus income of about 30% of their income.
By contrast, a third of households earn their income from labour, but this
groups share in the total earnings is only 16% and has surplus income just
about 7.7% of their income. Similarly, households with chief earner in late
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enhancement of financial literacy and education of households to do better
in achieving lasting financial security.
Challenges in deliveringfinancial education
Devising financial education initiatives for the un/under bankedhas to take into account the existing financial landscape, the social
economic realities of this class and the fact that invariably, such groups are
beset with low literacy levels.
The main difference in the financial planning for the poor families is that
they have fewer resources and opportunities. When people are struggling
to make ends meet on a day-to-day basis, good money management
becomes a daily challenge. While they use many creative ingenuousstrategies to manage their money, these often develop through trial and
error rather than by design. Financial education has a role in "building the
capacity of the poor to gain control, become proactive, use information and
resources to enhance their economic security and more effectively use
financial services". When better-informed clients become better consumers
of financial services, financial institutions benefit.
Further, as already mentioned, the process of educating may invariably
involve addressing deep entrenched behavioural and psychological factors
that could be major barriers. For example, in case of many of the
microfinance initiatives operating on the 'group liability' concept it could
be a great challenge to drive home the very basic rationale for such an
arrangement, starting from inculcating the habit of small savings to
appreciation of the concept of 'collective responsibility'.
A study regarding Mexican experience has highlighted that the social and
cultural factors embedded in the financial landscape greatly influence theability of individuals to use financial services effectively. Results indicate
that in addition to material resources, the inherent nature of social relations
and community links played a crucial role in improving access to and use
of financial services. The transformation of financial information,
knowledge, experience, attitudes and social relationships into financial
education and sophistication constituted a cognitive resource to reducing
vulnerability. This leads us to suggest that a culture of finance is an
important catalyst for individuals change and development.
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It is also important to note that financial education may contribute to
behaviour modification, but many factors lend to influence a persons
financial behaviour. Contrary to common belief, motivation is cultivated
internally and rarely can be cultivatedsustainably, at leastby an
external factor. The biggest obstacle to financial education is motivating
individuals to pursue it. In other words, financial education does not
necessarily motivate individuals; motivation brings individuals to financialeducation. Here the role of banks assumes importance as financial
counsellors of the clients. Financial Education means not only educate the
peoples but also give them a comfortable life which they desire.
Possible theme
Inspite of the above challenges, it should be possible to arrive at a set ofbasic themes/issues that could be addressed effectively through a financial
education program. As per a study conducted by the under the project
"Financial Education for the Poor" by Microfinance Opportunities, a
microenterprise resource centre, a consistent demand was found for the
following broad themes of financial education:
Money Management: How to proactively manage money
Debt Management: How to control debt and avoid over-indebtedness Managing Savings: How to save regularly and in a safe location Financial Negotiations: How to strengthen clients' bargaining
position vis--vis input suppliers, other household members, and
financial institutions Use of Bank Services: How banks work and impose charges; How
clients can maximize bank services, interact with banks, and
effectively use ATMs
An analysis of such programs in the OECD countries reveals that many
educational programmes are integrated into the provision of specific
financial services, such as first or basic bank accounts, checking and
savings accounts and matched-savings plans while others adopt a broad
stand-alone approach, teaching, budgeting, savings and credit
management, etc., with no connection to any product of service. Aims tend
to vary according to the majority target population.
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For the generic unbanked, aims are to explain the benefits and use of
bank account ownership and services or to build up fundamental
financial literacy skills.
For low/moderate-income underserved consumers, most
programmes offer advice on general money and credit management;
whereas others have a specific goal or are embedded in schemes to
encourage savings, asset-building and homeownership.
These initiatives aim to build economic empowerment and increase long-
term self-sufficiency in order to revitalize and stabilize disadvantaged
communities.
Issues on financial literacy
One of the major barriers in the way of delivery of financial services is thelack of basic knowledge and lack of awareness of the products and services
available from the banks. It is important to note that the Financial
Inclusion Task Force of the United Kingdom, one of the pioneers to talk of
financial inclusion, has identified 'access to free face-to-face money
advice' as an important component of financial inclusion, apart from
'access to banking' and 'access to affordable credit'. People need
information and advice when they either save their money or get into debt.
Such information and guidance can best be delivered by appropriate
mechanisms and if such effective mechanisms are put in place through the
banks, they in turn would reinforce the demand for financial services.
Another impediment is the difficulty or the lack of ease of addressing
issues that affect a common man. Despite concerted efforts, the current
state of transparency coupled with the difficulty of consumers in
identifying and understanding fine print information leads to an
information asymmetry between the financial intermediary and the
customer. It is important to understand that the lack of such awareness initself amounts to risk; and the challenge is to make customers aware of the
various risk. In terms of promoting financial inclusion, much of the work is
simply in providing easily understood information in a safe and engaging
environment.
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CDs. Banks can provide funds for setting-up such kiosks and meeting the
running costs or the cost can be shared among banks, and the other
organizations involved in the process.
Some non-banking initiatives are also being experimented in various parts
of the country. In this context, the project on financial counselling service
for poor self-employed women in India started by SEWA is well known.Project tomorrow, as it is called, was started in 2001 with a purpose to
develop and test a financial counselling curriculum to help participants
manage money productively, plan ways to increase assets, address life
cycle events, and manage risks. Through this project, SEWA has set up a
training unit and training delivery system and is developing tools and
procedures to monitor the counselling work. The project began with
market research to assess the needs and demand among SEWA clients for
financial education, followed by a 'training of trainers' course. SEWA isnow providing financial counselling to its clients through a weekly course.
The initial experience suggests that participants grasp the concepts
presented and welcome new perspectives stemming from such training.
While talking about financial education, it is important that the focus
also extends to the urban populace, including the literate masses,
which may not be having the financial acumen, technology
suaveness and may not be 'financially literate'. It is not that the urban
masses are well versed in the Internet Banking and other newer
methods of banking; there continues to remain a segment, which
either avoids using the services due to lack of confidence or remains
unaware of the options available. Financial education to such target
group would be mutually beneficial.
There is also a need for greater awareness of various products and
services offered by banks. Finally, the concept of financial education could ideally be stretched
to cover economic education as well. At a broader societal level,given the path of economic reforms India has embraced since the
early nineties, and the ensuing debates, it is imperative that the
society and general populace be objectively informed about the
fundamental economic issues and the rationale for, at-times difficult,
choices to be made in this regard. This could go a long way in
creating an informed and harmonious democracy.
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Initiatives taken by ReserveBank of India towards FinancialEducation
The RBI, on its part, wishes to advance the cause of financial education in
our country as part of an overall strategy. The concerted efforts areunderway to expand the reach of formal finance in view of recent emphasis
on financial inclusion. This needs to be buttressed with financial education
to generate greater customer awareness and understanding of financial
products and services. Concurrently, a process of credit counselling is
being encouraged to help all borrowers, but particularly those in distress to
overcome current financial problems and gain access to the structured
financial system. The Banking Codes and Standards Board of India
(BCSBI) has also been instituted which is expected to ensure that thebanks formulate and adhere to their own comprehensive code of conduct
for minimum standards of banking services, which individual customers
can legitimately expect. And finally, a Banking Ombudsman Scheme has
been instituted for redressal of grievances against deficient banking
services, covering all the States and Union Territories. The RBI has also
been exploring the possibility of instituting a Depositor Protection Fund
(DPF). The Fund can be utilised towards generating greater awareness for
the common man on issues relating to financial education and counselling.This could be complemented with providing greater role to our Regional
Offices to promote financial education in their respective jurisdictions.
Project Financial Literacy
In India, the need for financial education is even greater considering the
low levels of literacy and the large section of the population, which is still
out of the formal financial set-up. Towards this end, the Reserve Bank ofIndia (RBI), with the objective of disseminating information on the Central
Bank and general banking concepts to various target groups including
school and college students, has undertaken an initiative titled 'Project
Financial Literacy.' The project also aims to educate women, rural and
urban poor, defence personnel and senior citizens on general banking
concepts. Recently, a pilot programme has been launched on financial
literacy in Karnataka. The programme, launched by RBI in collaboration
with the state government, will involve introduction of financial andrelated material in the curriculum of schools and colleges. Significant steps
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Reserve Bank of India has made a link in its website named Common
man. This site is available in 13 regional languages including Hindi and
English.
It provides knowledge about The role and functions of RBI
How is Indias central bank relevant to the people
RBI regulations Solve the FAQ of peoples Provides information how to complain against commercial banks as
well as central bank.
It also provides information on money, banking and finance
RBI young scholarshipaward schemeTo encourage learning about the Reserve Bank of India (RBI) among the
youth of the country, the RBI conducts a major awareness and sensitization
exercise on the role of the Reserve Bank and the banking system across the
country. This exercise, the RBI Young Scholars Award Scheme, exposes
youngsters to an actual banking and financial environment and inculcates asense of pride in the selected ones of having had the opportunity to
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associate them with a prestigious organisation, the central bank of the
country.
Currency note posters
The Reserve Bank of India provides currencynote posters which name is
Know Your Bank Note. In this link RBI provides the security features of
Indian currency Notes. These are from RS.10 to Rs.1000 in all regionallanguage.
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The Working Group (Chairman: Prof.S.S.Johl) constituted by the Reserve
Bank to suggest measures for assisting distressed farmers had
recommended that financial and livelihood counselling are important for
increasing the viability of credit. Further, the Working Group constituted
to examine procedures and processes for agricultural loans (Chairman:
Shri C.P.Swarnkar) had also recommended that banks should actively
consider opening of counselling centres, either individually or with pooledresources, for credit and technical counselling with a view to giving special
thrust in the relatively under-developed regions. In the light of the
recommendations of these two groups, the convenor banks of the State /
Union Territory Level Bankers' Committees were advised in May 2007 to
set up, on a pilot basis, a financial literacy-cum-counselling centre in any
one district in the State/ Union Territory, coming under their jurisdiction.
Further, on the basis of the experience gained, the Lead Banks concerned
were advised to set up such centres in other districts.To conclude, economic and financial sector reforms have placed higher
disposable incomes with the public. Availability of a variety of new
financial products on both, credit and investment sides, which are provided
by a host of financial intermediaries has necessitated that the investing
public understands the nuances of each product and product supplier, and
takes an informed decision about where he should invest. At the same
time, those who are not part of the formal financial system need to be
educated about banking and why they should have a relationship with banks. Financial education is considered an important element for
promoting financial inclusion and ultimately financial stability. Financial
education would benefit the financially-excluded by enabling them to
understand the benefits and the ways to join the formal financial system. It
could also benefit the financially-included by helping them make informed
choices about the products and services available in the market to their best
advantage.
Objective of Counselling:
i. To provide financial counselling services through face-to-face
interaction as well as through other available media like e-mail, fax,
mobile, etc. as per convenience of the interested persons, including
education on responsible borrowing, proactive and early savings, and
offering debt counselling to individuals who are indebted to formal
and/or informal financial sectors;
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ii. To educate the people in rural and urban areas with regard to various
financial products and services available from the formal financial
sector ;
iii. To make the people aware of the advantages of being connected with
the formal financial sector ;
iv. To formulate debt restructuring plans for borrowers in distress andrecommend the same to formal financial institutions, including
cooperatives, for consideration ;
v. To take up any such activity that promotes financial literacy,
awareness of the banking services, financial planning and
amelioration of debt-related distress of an individual;
Initiatives taken byregional RBI offices in IndiHyderabad regional office
Hyderabad office of the Reserve Bank has formulated a multi-modal
(informative display through posters, brochures, multi-media
presentations, video films, demonstrations, computer games), multi-lingual
(English, Hindi, Telugu and Urdu) and customised interactive strategies
(like stalls in exhibitions, visits to schools, colleges, villages, meeting with
bankers, traders, farmers, SHGs, tour of the Reserve Bank) for spreading
financial literacy among the common persons in general and school
children, college students, farmers, women and villagers in particular.
New Delhi Regional OfficeNew Delhi Office brought out a comic book on basic banking, titled
'Raju and the Money Tree'. A Core Committee on Financial Education,
comprising of officers from RBI, New Delhi conceived and scripted the
story of the comic book as also handled the artwork. The comic book was
brought out in English and Hindi. Copies of the comic book were handed
over to the officials of Government of Himachal Pradesh at Simla on July
1, 2007 coinciding with the inauguration of the sub office. The comic book
was also brought out in Braille for the benefit of visually impaired persons.
The services of National Association for the Blind, New Delhi were taken
for adapting the story from the comic book.
Chennai Regional OfficeChennai Office has brought out two comic books titled 'Currency Matters'
and 'Bank Matters' in English and Hindi as part of the Bank's financial
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education efforts. The stories for the comic books were prepared in-house
by a team of officers, drawn from various departments of the local office
and the artwork was out sourced. Copies of the comic books were handed
over to the officials of Government of Himachal Pradesh during the
inauguration of the Simla sub-office on July 1, 2007. The books are being
translated into Tamil.
Bangalore Regional OfficeBangalore Office has released, under its FIN-LIT project, a series of four
comic books, in English and Kannada, dealing with (i) introduction to
basic banking, (ii) deposits, (iii) SHGs loans especially agricultural loans
and other livelihood loans like Govt. Sponsored schemes, etc. and (iv)
other lifestyle enhancing loans like housing loans, vehicle loans, etc. and
other products like ATM cards debit, credit cards. A short film, based on
the frames of the books, with voice over in Kannada has also been
released. As an initiative in reaching out to a larger audience, the Officehad put up a stall in the Mysore Dasara Exhibition where this film was
screened along with other information of relevance to the common man.
The whole project of writing the stories and doing the illustrations was
undertaken in house.
Initiatives taken byReserve Bank India,Bhubaneswar towardspromoting financialeducation and literacyFinancial Education- Credit Counselling:- Persuaded UCOBank to open a credit counselling centre at Balasore. The Centre plans to
take up a Literacy drive in association with the local chapter of the
Chartered Accountants on Fundamentals of Book Keeping to SHG groups.
Financial Literacy:- The publication Bank Matters brought out byChennai Office has been translated into Oriya language and Santhali
language. The books were released by Honble Union Minister of State
(Shri Pavan Kumar Bansal) on November 14, 2007 at the 111th SLBC
meeting at Bhubaneswar.
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Publicity through TV / Radio:- As a supplement to the field levelefforts, RBI, BBSR have also embarked on a promotional biz. The SLBC
contracted 15 minutes space per week for six months in DD and AIR
respectively in which a programme SANCHAYA on issues relating to
Financial Inclusion (generic and not bank specific) were discussed. The
programme highlights financial literacy and addresses queries from
viewers. The broadcast covers 11 districts of Orissa. The expenses on thisad biz are on cost sharing basis by SLBC members.
Social Campaign- Putting into practice what RBIpreach:- RBI have sold the idea to the Rotary Club (Bhubaneswar) toinvolve themselves in financial inclusion exercise in a slum in
Bhubaneswar and other cities. The Rotary Club received the idea warmly
and in association with Vijaya Bank introduced financial inclusion
programme in the identified slum in which 1700 slum dwellers were
brought under the fold of banking. Most of them are migrant labourers
from Andhra Pradesh and RDs address to them in Telugu (lasting for
about 15 minutes) spurred them to open the accounts.
100% Financial Inclusion :- One of the objectives of Financialeducation is to help inclusive growth. Ganjam District (population 31.60
lakh) has been declared as 100% financially included. Till now in Orissa27 districts are declared 100% financially included Out of 30 districts. The
rest three districts are Jharsuguda, Malkanagiri & Nabarangapur.
Mission Approach:- The Anganwadi workers of State Governmentact as business facilitators and are being paid Rs 10/- per account opened
by the branch concerned. The expenditure on photographs of the
financially excluded persons approaching the bank for opening the
accounts is borne by the branch concerned. Our officers are frequentlyinteracting with the business facilitators and coordinators to educate them
about the mission.
Educating School children and rural population:- TheState Level Essay Competition for school children on financial inclusion
organised by RBI was received warmly.
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Financial LiteracyProgrammes held by OrissaRegional Office5 19.06.09 UCO Bank Bhograi
(Chandaneswar-
Gazipur)
UCO BANK SHGGroups and
Farmer club
members
6
14.07.09 St Xaviers High
School ,BBSR
Students of
IX & X
standard
721.07.09 BJB English Medium
School,
Bhubaneswar
Students of
IX & X
standard
8
27.07.09 DAV School,
Pokhariput,
Bhubaneswar
Students of IX
& X
Standard9
01.08.09 Kalinga Institute of
Social Sciences
Students of IX
& X standard
10
03.08.09 Marsaghai High
School,Kendrapara
Students of IX
& X standard
11
06.08.09 Bipin Bihari School,Bhubaneswar for the
deaf and dumb
Deaf anddump
students of
VIII, IX &
X standard
12
07.08.09 Bhima Bhoi School
for the Visually
Challenged,Bhubaneswar
Visually
challenged
students ofVIII, IX &
Reserve Bank of India 49
s.lno
date place Organisationinvolved
Coveredpeople
1
7.2.200
9
Maitapur G.P in
Simulia Block of
Balasore District
Meeting
with Farmers
club viz.
Palli Pragati
KrushakMancha,
2
23.05.0
9
Padmasekharpur,
Bhubaneswar
UCO BANK
Educate the
villagers of the
advantages of
opening bank
account
327.05.0
9
Indian Bank,
Microstate branch,
Cuttack Road
INDIAN
BANK
SHG Groups
4
15.06.0
9
SBI, Sakhigopal,
Puri
STATE
BANK OF
INDIA
SHG Group
members
and NGOs
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X standard
13 14.08.09
Zilla School Puri
Students of IX
& X standard
14 18.08.09
Palli Unnayana SevaSamiti Naharkanta,
Bhubaneswar
XaviersInstitute of
Management,
Bhubaneswar
Students of IX
& X standard
15
Nov 2nd
to 8th
2009
Baliyatra Exhibition,
Cuttack
General public
16Nov 21st
to 24th
2009
Confederation of
Indian Industry-
exhibition
General public
Initiatives taken by OrissaState Govt. towardsFinancial Literacy
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Orissa state govt has supplied some financial education books to the public
especially to the women of the state who dont know about the basic
financial aid or services.
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DATA ANALYSIS ANDINTERPRETATION
While undertaking this project, there is a need to conduct a survey work.The work is confined to the various areas of Bhubaneswar. Questionnaire is
used to record the data.
Analysis
1- Meaning of BANK :
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INTERPRETATION
In the above chart, it is depicted that 28% of the people says that bank is an
institution which accept only deposits. 18% of the people say that bank is an
institution which provides loans and 54% says that bank is performing both
the activities.
2-Types of banks:
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Interpretation
From the above chart it is shown that 30% of the people known about
different types of bank in India. 70% of the people unable to answer to
about the types of bank in India
3- Formalities required to open a bank
account:
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INTERPRETATIONFrom the above chart it is shown that 42% of the people know that the
formalities required to open a bank account.58% of the people are
ignorant about that.
4- Different types of account:
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INTERPRETATION
From the above chart we are able to know that, 32% of the people
know about the various types of bank accounts and 68% of the people
were unable to answer.
5- Different kinds of services provided:
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Interpretation
35% of the respondents are known about the various kinds of servicesprovided by the bank. 65% of the respondents are unknown about the
various services provided by the bank.
6- Account that facilitated various payments(electricity bills, phone bills and school fees etc.)
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Interpretation
From the above chart, it is depicted that only28% of the respondents
are knowing which account provide payment facility. Others i.e. 72%
of the respondent are unknown about this.
7- Banking Ombudsman
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interpretation
From the above chart, it is clear that only 9% respondents are known
about the Banking Ombudsman. 91% respondents are unknown about this.
8 Account that is accompanied with
deposit insurance
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Interpretation
From the above chart it is depicted that, 11% of the respondents are known
that bank account is accompanied with deposit insurance.89% of therespondents are unknown about this.
9- Sole right of issuing the currency note:
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Interpretation
From the above chart, we can see that 42% of the respondents are aware
about the note issuing authority, still 58% respondents are ignore about
this.
10- Awareness regarding FORGED NOTE:
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Interpretation
From the above chart, it is depicted that 37% of the respondents are aware
about the forged note. Still 63% of the respondents are unknown about the
security features of the currency note.
Financial awareness among varioustarget groups
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Interpretation
A Women
B School and college going children
C Urban poor
D Defence Personnel
E Senior citizen
From the above chart we can see that:
Only 28% women are knowing about the various banks, banking
services and their uses
12% of the school and college going students know about the Central
bank and other banking habits.
20% urban poor are aware about it. 21% senior citizens are aware about it.
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Major findings from thesurvey From the survey, I came to know, the age-old concept of Bank still
holds good now. Though banks are coming up with many new
technologies and opened service in various fronts, still people are not
very much aware of it. For many people, bank is still keeping money
and lending institution. From the survey, it was evident that-not many
people know about investments. For them investment is all about
keeping money in savings account. They were completely except a few
are ignorant about mutual fund and other banking products.
A huge mass of people of people are unaware of the different types of
bank exist in India. The figure above shows the unawareness of people
among the existence of various banks in India.
A decent margin of respondents knows about the formalities i.e. the
documents required in opening an account. Later it was realized that,
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all of them have either have one or multiple accounts. Bank should
educate its customers regarding the documents required to open an
account. It might reduce the work pressure the bank employees as well
as the educated customers may in turn help other customers.
Basically, people were aware of savings account. Though many people
had accounts in various banks but they were unable to tell the kind of
account, they are operating. Maximum respondents were just aware of
savings account. But many of them lack awareness regarding Current
account, cash credit account, OD etc.
Currently, it is seen that banks are coming up with many new kind ofservices thanks to new technologies. E.g.-Mobile Banking. But the
problem lays when customer are completely ignorant of how to use
those technologies. They are not properly educated to use these
technologies. Some customers, who know about these technologies,
feel scared to use these technologies thanks to many fraudulent
activities happening in various technologies front.
Per example: Losing money in online transaction.
As discussed before, many people are not aware of these technologies.
Banks through various awareness program should educate customers.
Secondly, many people do not feel secure in these kind of transactions
as they are scared of loosing their money. Banks should create faith
among the customers for using these kind of technologies as not only it
will save time for both customers and bank but also will save their
money. A few percentage of respondents are aware about the Banking
Ombudsman. It is generally created to solve the grievances of the
customers. The major concern of this is to protect the customer.
From the survey, I found insurance as the most mislead product in the
industry. When you use the term insurance, many customers do not
look beyond LIC. Banks are also not doing enough to educate
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customers regarding insurance and how it will help them to create
wealth and secure the financial independence in the event of the
customers death. Bank assurance should be provided in all banks.
Still peoples are not fully aware about the central bank of India.
Unawareness among the people about the forged notes.
SuggestionsCreate Awareness & Financial Literacy
Governments and all concerned stakeholders should promote unbiased,
fair and coordinated financial education.
Financial education should start at school, for people to be educated as
early as possible.
Financial education should be part of the good governance of financial
institutions, whose accountability and responsibility should be
encouraged. Financial education should be clearly distinguished from commercial
advice; codes of conduct for the staff of financial institutions should be
developed.
Financial institutions should be encouraged to check that clients read
and understand information, especially when related to long-term
commitments or financial services with potentially significant financial
consequences: small print and abstruse documentation should be
discouraged. Financial education programmes should focus particularly on
important life-planning aspects, such as basic savings, debt, insurance
or pensions.
Programmes should be oriented towards financial capacity building,
where appropriate targeted on specific groups and made as
personalised as possible.
Future retirees should be made aware of the need to assess the financial
adequacy of their current public and private pensions schemes.
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National campaigns, specific Web sites, free information services and
warning systems on high-risk issues for financial consumers (such as
fraud) should be promoted.
Intensive awareness, education and promotion drive to create an in-
depth impact on the masses.
Government should promote introduction of basic banking relevance,
services, merits as a topic in secondary and higher secondary classes inall education institutions.
Government sponsored publicity campaigns through all Medias
radio; television; newspapers e-choupal; village panchayat; movies;
local stage shows etc.
Banks should design and organize aggressive education cum
promotion campaigns in unbanked parts of urban, semi urban and
rural areas to enhance financial literacy and awareness, as well as to
remove the doubts and apprehensions that the masses have towards thebanking sector.
Banks should involve the knowledgeable and well-informed local
inhabitants in such activities. This will help the banks to consolidate
and ensure, prompt and extensive response from populace.
Banks should gather support from the NGOs, retired bank personnels,
and academic institutions, to reach the desired numbers within a
limited span of time. Once the fallacy is removed from the minds of
the general public, they automatically will join the mainstream. The all-round awareness and education simulation will drive them to open
savings and current accounts. This will mark the beginning of basic
banking in true sense.
There is an utmost need to improve BC/BF model.
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ConclusionFinancial literacy is an understanding of personal finance and the ability
to use that understanding to benefit your economic condition. Those withfinancial literacy deficiencies often find it hard to manage money and
save for long-term personal goals, such as buying a house or retiring.
Financial literacy can be promoted by bringing in wider section of public
within the institutional literacy framework. Such institutional initiatives
would largely focus on improving literacy standards. Also, all financial
service providers have a moral responsibility to bring in a fair degree of
transparency and fairness, more so those engaged in selling financialproducts and financial counselling and the ethical grid within which they
are supposed to work. This initiative is no less challenging than
propagating financial literacy to the members of the public.
There is a need for banks and other agencies striving to extend financial
education to the masses to appreciate that financial inclusion is a
continuous process. Efforts to extend literacy to make the common man
enabled by being aware of the evolving functional, legal and technical
issues cannot be a one-time effort.
A common effort of the educational programmes typically focuses on the
'supply' side that stresses on attracting customers in the financial fold.
However, what is needed is to have is an "auto pilot" concept, where the
prospective customer is empowered to make / demand the desired
services. This could create a qualitative 'demand' situation of the financial
services.
The objective of financial education is also customer protection. It helps
customers to better understand and manage financial risk and deal with
complexities of the market place and take advantage of increased
competition and choice in the financial sector. The RBI, on its part,
intends to advance the cause of financial education in the country as part
of an overall strategy. Currently, a process of credit counselling is being
encouraged to help all borrowers, particularly those in distress, to
overcome current financial problems and gain access to the structuredfinancial system.
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However, in the ultimate analysis financial education is only one pillar of
an adequate financial policy to improve financial literacy and expand
access to financial services. It can complement, but not replace other
pillars such as greater transparency, policies on consumer protection and
regulation of financial institutions.
This project has argued that financial literacy is important at many levels.It is an essential element in enabling people to manage their financial
affairs and can make an important contribution to the soundness and
efficiency of the financial system, and to the performance of the
economy.
Improved financial literacy can benefit individuals and families by giving
them more control over their money and helping them make better
financial decisions. Good financial literacy skills will build the capacity
of Indians to better understand and manage financial risk, and take
advantage of increased competition and choice in Indias finance sector.
Financial literacy is in the interest of India as a whole, and the creation of
a financially healthy India is the responsibility of all government, the
private sector and community-based organisations. It is too large a task
for one group of stakeholders to achieve on their own.
The final result is not to create financial experts; it is more important toequip individuals with sufficient knowledge to make sense of financial
activities, seek out appropriate information, feel able to ask relevant
questions, and be able to understand and interpret the information that
they subsequently acquire.
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Bibliography Improving financial literacy
OECD Publication
2005
Speeding of financial inclusion
By Sameer kocher 1st edition
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Financial Services
By Nalini Prava Tripathy
2008
Financial Services
M.Y.Khan
2004
ReferenceThe Role of Financial Education: The Indian Case-Inaugural Address
by Dr. Y. V. Reddy, Governor, Reserve Bank of India at the
International Conference on Financial Education organised byOECD at New Delhi on September 21, 2006.
Financial Education: Worthy & Worthwhile speech by Dr. Duvvuri
Subbaro, Governor, Reserve Bank of India, at the RBI-OECD
workshop at Bangalore on March 22, 2010.
Special address by Ms Shyamala Gopinath, Deputy Governor of the
Reserve Bank of India, at BANCON 2006, Hyderabad, 4November2006.
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Financial Inclusion through financial Literacy & Credit
counselling( Address by Dr. K.C. Chakrabarty, Deputy Governor,
Reserve Bank of India, at the launch of Federal Ashwas trust on
November 30, 2009 in Kochi, Kerala.
Financial Literacy: Concept & its importance in India by Mr. BhusanBhatia, Sr Faculty, Punjab National Bank, Regional Staff College,
Panchakula
Importance of Financial Literacy in the Global Economy Keynote
Address by The Hon. Donald J. Johnston, Secretary-General of the
OECD to the Financial Education Summit, Kuala Lumpur, 12
December 2005
APPENDIXQuestionnaire
1 - What is a bank?
(A) An institution which accept deposits
(B) An institution which provide loans
(C) Both
2 Do you know what are the different types of banks inIndia ?
(A) Yes (B) No
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3 Do you know the formalities required to open a bankaccount ?
(A) Yes (B) No
4 Do you know what are the different types of account in
a bank ?
(A) Yes (B) No
5 Do you know what are the different types of servicesprovided by the bank ?
(A) Yes (B) No
6 - Which account allows the facilities like payment ofelectricity bill, phone bills and school fees ?
(A) Saving a/c (B) Current a/c (c) fixed deposits
7- Do know what is Banking Ombudsman?
(A)Yes (B) NO
8-Do you know the bank account is accompanied withdeposit insurance?
(A) Yes (B)
9 Do you know who has the sole right of issuing theCurrency note ?
(A) Yes (B)
10- Can you identify a Forged note ?
(A)Yes (B)No
This is used to collect and record the data collected
from 5o sample.
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