This article is based on the excerpts from the RBI report titled ‘National Strategy for Financial Education 2020-2025’ published on 20thAugust 2020 -Ed.

Financial literacy supports the pursuit of financial inclusion by empowering the customers to make informed choices leading to their financial well-being.

The first National Strategy for Financial Education (NSFE: 2013-2018) is completed. The review of the progress was undertaken by the Technical Group on Financial Inclusion and Financial Literacy (TGFIFL– Chair: Deputy Governor, RBI) under the Financial Stability and Development Council (FSDC – Chair: Hon’ble Union Finance Minister). The various developments have taken place over the last five years notably the Pradhan Mantri Jan Dhan Yojana (PMJDY), the National Centre for Financial Education (NCFE) in consultation with the four financial sector regulators and other relevant stakeholders has prepared the revised NSFE (2020-2025).

The NSFE document intends to support the vision of the GoI and financial sector regulators by empowering various sections of the population to develop adequate knowledge, skills, attitude and behaviour which are needed to manage their money better and plan for their future. The strategy is recommending adoption of the Multi-Stakeholder Approach to achieve financial well-being of all Indians.
The following strategic objectives have been laid down to achieve the vision of creating a financially aware and empowered India:

  1. Inculcate financial literacy concepts among the various sections of the population through financial education to make it an important life skill.
  2. Encourage active savings behaviour.
  3. Encourage participation in financial markets to meet financial goals and objectives.
  4. Develop credit discipline and encourage availing credit from formal financial institutions as per requirement.
  5. Improve usage of digital financial services in a safe and secure manner.
  6. Manage risk at various life stages through relevant and suitable insurance cover.
  7. Plan for old age and retirement through coverage of suitable pension products.
  8. Knowledge about rights, duties and avenues for grievance redressal.
  9. Improve research and evaluation methods to assess progress in financial education.

The document recommends adoption of a ‘5 Cs’ approach for dissemination of financial education through emphasis on the development of relevant Content (including curriculum in schools, colleges and training establishments), developing Capacity among the intermediaries involved in providing financial services, leveraging on the positive effect of Community-led model for financial literacy through appropriate Communication Strategy and lastly enhancing Collaboration among various stakeholders.

The recommendations laid down in the strategy under each of the ‘5 Cs’ are as under:

Content: Financial literacy content for school children, teachers, young adults, women, new entrants at workplace / entrepreneurs (MSMEs), senior citizens, persons with disabilities, illiterate people, etc.

Capacity: Develop the capacity of various intermediaries who can be involved in providing financial literacy. Develop a ‘Code of Conduct’ for financial education providers.

Community: Evolve community-led approaches for disseminating financial literacy in a sustainable manner.

Communication: Use technology, mass media channels and innovative ways of communication for dissemination of financial education messages. Identify a specific period in a year to disseminate financial literacy messages on a large / focused scale. Leverage on public places with greater visibility (eg bus stand, railway stations, etc) for meaningful dissemination of financial literacy messages.

Collaboration: Preparation of an information dashboard. Integrate financial education content in school curriculum, various professional and vocational courses (undertaken by Ministry of Skill Development and Entrepreneurship (MSD&E)) through their sector skilling missions and the likes of B.Ed / M.Ed programmes. Integrate financial education dissemination as a part of various on-going programmes. Streamline efforts of other stakeholders for financial literacy.

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