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

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India- Some facts

Geographical area – 7th in the world -Widely dispersed terrain

Population – 2nd in the world–1.2 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%)

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Financial Inclusion & Financial Literacy

An Integrated Approach










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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


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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

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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

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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

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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


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Financial Literacy Material

Financial Literacy Guide-Trainer’s

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


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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

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1113 Financial Literacy Centres operational throughout the country

128,736 financial literacy activities conducted

6.8 million people educated

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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

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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

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Trinity to make Financial Stability Possible –

The ultimate objective



Financial Literacy

Financial Inclusion

Consumer Protection

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Financial Literacy for un-banked

Financial Literacy Centre - Awareness camp Literacy drive by RBI

Accounts opened in camps Women getting linked to banks

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Catching them young

Children learning to operate Opening accounts for children

Curious to know more about banks Financial Literacy in a school

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Thank YOU

[email protected]