The Reserve Bank of India (RBI) on Thursday came out with a '5-Core Actions' approach for promoting financial education, which among other things include development of relevant content for school children and adults, community participation and collaboration among various stakeholders. The 'National Strategy for Financial Education 2020-2025' (NSFE), released by the RBI, has suggested a multi-stakeholder-led approach for creating a financially aware and empowered India.
The five Cs, outlined by the strategy paper, are: Content, Capacity, Community, Communication and Collaboration.
Strengthening financial inclusion in the country has been one of the important developmental agendas of both the Government of India and the four financial sector regulators (RBI, SEBI, IRDAI and PFRDA).
"Financial literacy supports the pursuit of financial inclusion by empowering the customers to make informed choices leading to their financial well-being," according to NSFE.
To achieve the vision of creating a financially aware and empowered India, NSFE has laid down strategic objectives, like inculcate financial literacy concepts among the various sections of the population through financial education to make it an important life skill, and encourage active savings behaviour.
Among the other strategic objectives are encouraging participation in financial markets to meet financial goals and objectives, developing credit discipline and encourage availing credit from formal financial institutions as per requirement, and improving usage of digital financial services in a safe and secure manner.
Managing risk at various life stages through relevant and suitable insurance cover and plan for old age and retirement through coverage of suitable pension products are the other key objectives laid down in the document.
The document stresses on development of financial literacy content for school children (including curriculum and co-scholastic), teachers, young adults, women, new entrants at workplace/entrepreneurs (MSMEs), senior citizens, persons with disabilities, illiterate people.
"Update content of financial education in school curriculum for students of classes VI to X", said action plan for NSFE (2020-25).
It also makes a case for integrating financial education in courses like B.Ed./M.Ed. besides other teachers' training courses to create a cadre of financially educatd teaching professionals.
It also calls for development of a financial literacy mobile app, and leverage social media.
NSFE further said the Technical Group on Financial Inclusion and Financial Literacy (TGFIFL) would be responsible for periodic monitoring and implementation of National Strategy for Financial Education.
There would also be periodic monitoring of the activities undertaken by various stakeholders for dissemination of basic, sector-specific, and process literacy.
Since the launch of the first NSFE in 2013, various stakeholders have undertaken several measures to improve the financial literacy of the cross-section of the population in the country, it noted.
Financial literacy is defined as a combination of financial awareness, knowledge, skills, attitude, and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being.
Based on the review of progress made under the strategy and keeping in view the various developments that have taken place over the last 5 years, the National Centre for Financial Education (NCFE) has prepared the revised NSFE (2020-2025), the document said. It was prepared in consultation with the four financial sector regulators and other relevant stakeholders, the document added.
"The NSFE document intends to support the Vision of the Government of India 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," it said.
The strategy recommends adoption of a multi-stakeholder approach to achieve financial well-being of all Indians.