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FINANCIAL INCLUSION & FINANCIAL LITERACY THE INDIAN MODEL Bipin Nair Reserve Bank Of India OECD/Thailand Seminar on Financial Inclusion and Financial Literacy in Asia December 2014

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    Bipin Nair Reserve Bank Of India

    OECD/Thailand Seminar on Financial Inclusion and Financial Literacy in Asia

    December 2014

  • India- Some facts

    Geographical area 7th in the world -Widely dispersed terrain

    Population 2nd in the world1.2 billion

    By nominal GDP 10th largest economy in the world

    30 States and 6 Union Territories, 673 districts,600 thousand Villages

    Multilingual and multiethnic society

    Low level of General Literacy (74% in 2011; FEMALE-65%), Large no. of Financially excluded people (more than 50%)

  • Financial Inclusion & Financial Literacy

    An Integrated Approach









  • Financial Literacy

    Improve financial access through financial education Objective

    Villages and unbanked pockets in urban locations


    Multi Agency-Partnership with Government & other stakeholders Approach

    FSDC - Technical Group on FI&FL - Financial sector regulators, Government, Education Boards, Curriculum Developers as members


  • Institutional Mechanism

    1113 Financial Literacy Centers

    Banks- Public & Private Sector, Regional Rural Banks- 100 Thousand branches

    36 State Level Bankers Committees , 673 Lead District Managers

    Reserve Bank of India- Financial Inclusion Advisory Committee

    A Separate Technical Group on Financial Inclusion and Financial Literacy- All financial sector regulators, Government

    Financial Stability Development Council (FSDC) Headed by Finance Minister-

    Mandated to focus on Financial Inclusion & Financial Literacy


    Literacy to be synced with access- Enrollment in Literacy Camps

    Messages for Unbanked audience-Related with real life events- Pictorial form-Lucid manner-Simple language

    Standard curriculum for basic conceptual understanding- Financial Literacy Material prepared

    FLCs (1000+) - Rural Branches)(45000+) Conduct Literacy Camps Once in a month - Financial Literacy Material

    Existing institutional Set up : Public & private sector banks

  • National Strategy for

    financial education

    National Strategy for Financial Education prepared-

    under the aegis of Technical Group on FI & FL

    Improve Financial access through Better Financial education-Focus on inclusion of financially excluded people in villages, Unbanked pockets in urban areas

    Develop standard contents to be used as Financial Literacy Material

    Conduct Nation Wide Survey to assess the Status

    Setting up of a National Centre on Financial Education

    Financial Education to be included in the School Curriculum Class VI to Class X

    Multi Agency Approach- Partnership with Government & other stakeholders

  • Financial Literacy Material

    Basic Concepts for unbanked Audience- Hindi and

    English- recently released in regional languages

    Available on RBI Website



    Financial Literacy Guide- 5 Sections- 50 Questions- Money Management, Savings, Saving with banks, Borrowings, Borrowing from banks Ready Reckoner for trainers

    Financial Diary- For distribution to target audience - Financial planning- Record income and expenses- Weekly/Monthly/Yearly

    Set of 16 posters-Pictorial Communication- Appealing Slogans


  • Financial Literacy Material

    Financial Literacy Guide-Trainers

    Guide 5 Sections-

    50 Questions

    Financial Diary- For distribution to target audience

    Facilitate Financial Planning

    Record income and expenses- Weekly/Monthly/ Yearly

    Set of 16 posters-Basic Messages

    Pictorial Communication-

    Appealing Slogans

    Basic Concepts for unbanked Audience- Hindi and English and 11 regional

    languages. Available on RBI Website


  • Design of Literacy Camps

    Annual calendar- Advance publicity-Involvement of Local Government authorities, prominent persons, NGOs, etc, Maintain a Database of participants

    3 sessions- 2 hrs each- Spread over three months

    Understanding of Basic financial concepts

    Financial Planning How to use financial diary

    Concept of door step banking ( Branchless)

    First Session

    Introduction -Business Correspondent (BC)

    Services available through BC

    Demo of ICT device - Modus operandi

    Account Opening

    Second Session-Fortnight after first session

    Timely delivery of smart cards

    Start of BC operations

    Visit - 15 days after second session-To ensure

    Feedback from villagers & BC

    Review usage of accounts Solve operational issues at site

    Third Session-2 months after second session

    Follow up transaction levels- Regular Reporting system


    1113 Financial Literacy Centres operational throughout the country

    128,736 financial literacy activities conducted

    6.8 million people educated

  • FIP Progress - March 2014


    Particulars Year ended Year ended Year ended Progress

    March 2010 March 2013 March 2014 April 2013 -

    March 2014

    1 2 3 4 5

    Banking Outlets in Villages Branches 33,378 40,837 46126 5289

    Banking Outlets in Villages Branchless Mode 34,316 2,27,617 337678 110061

    Banking Outlets in Villages Total 67,694 2,68,454 383804 115350

    Urban Locations covered through BCs 447 27,143 60730 33587

    Basic Savings Bank Deposit A/c through branches (No. in million) 60.19 100.80 126.03 25.23

    Basic Savings Bank Deposit A/c through branches (Amt. in Rs.

    billion) 44.33 164.69 273.29 108.60

    Basic Savings Bank Deposit A/c through BCs (No. in million) 13.27 81.27 116.93 35.66

    Basic Savings Bank Deposit A/c through BCs (Amt. in Rs. billion) 10.69 18.22 38.95 20.73

    BSBDAs Total (No. in million) 73.45 182.06 242.96 60.90

    BSBDAs Total ( Amt. in Rs. billion) 55.02 182.92 312.25 129.33

    OD facility availed in BSBDAs (No. in million) 0.18 3.95 5.92 1.97

    OD facility availed in BSBDAs (Amt. in Rs. billion) 0.10 1.55 16.04 14.49

    KCCs (No. in million) 24.31 33.79 39.94 6.15

    KCCs (Amt. in Rs. billion) 1240.08 2622.98 3684.49 1061.51

    GCC- (No. in million) 1.39 3.63 7.43 3.80

    GCC - (Amt. in Rs. billion) 35.11 76.34 1096.89 1020.55

    ICT A/Cs-BC- Transaction - (No. in million) (During the Year) 26.52 250.46 328.57 328.57

    ICT A/Cs-BC- Transactions - (Amt. in Rs. billion) (During the Year) 6.92 233.88 524.37 524.37

  • 6 pillars

    Universal Access to banking facilities

    Basic Accounts with O/D facility and RuPay Debit


    Financial Literacy

    Programmes Creation of

    Credit Guarantee Fund

    Micro Insurance

    Unorganized sector pension



    Pradhan Mantri Jan Dhan Yojana

  • 14

    Trinity to make Financial Stability Possible The ultimate objective



    Financial Literacy

    Financial Inclusion

    Consumer Protection

  • Financial Literacy for un-banked

    Financial Literacy Centre - Awareness camp Literacy drive by RBI

    Accounts opened in camps Women getting linked to banks

  • Catching them young

    Children learning to operate Opening accounts for children

    Curious to know more about banks Financial Literacy in a school

  • Thank YOU

    [email protected]