Financial inclusion poised to grow exponentially in India: RBI Governor Shaktikanta Das

Financial inclusion in India is poised to grow exponentially with digital savvy millennials joining the workforce, social media blurring the urban-rural divide and technology shaping the policy interventions, RBI Governor Shaktikanta Das said at a webinar on national strategy for financial education.

"As we inch towards the close of what has been an unprecedented year in terms of loss of lives and livelihood and the way of living in general, it would be appropriate to look at the area of financial inclusion and literacy which has both broad macro level implications for financial stability as also a micro connotation towards an individual's financial wellbeing," the RBI chief said, while speaking at the event organised by National Council of Applied Economic Research (NCAER) in Delhi.

To expand the reach of bank accounts across the length and breadth of the country, there needs to be greater focus on penetration of sustainable credit, investment, insurance and pension products by addressing demand side constraints with enhanced customer protection, Shaktikanta Das said.

He said that the interventions in financial education would have to be customised (local language and local settings) keeping the different target audience in mind.

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On role of technology in financial education, Das said though it has been a great enabler, it also has led to exclusion of certain segments of society. "It is imperative to build trust in formal financial services among the hitherto excluded population. Adequate safeguards need to be reinforced to address issues of cyber security, data confidentiality, mis-selling, customer protection and grievance redress through appropriate financial education and awareness. These cast great responsibility on financial education providers," he said.

He said that in a large country like India, which has an aspiring population, financial education cannot remain just the responsibility of financial sector regulators. This aspect is highlighted in the NSFE document which recommends a multi stakeholder led approach to achieve financial wellbeing of all, he said.

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Going forward, educational institutions, industry bodies and other stakeholders like think tanks, research institutions should come forward to shoulder the responsibility of increasing financial literacy through appropriate awareness campaigns, he added.

The RBI, in its recently released document 'National Strategy for Financial Education 2020-2025' (NSFE), has recommended a '5 C' approach for promoting financial education, which include development of relevant content for school children and adults, community participation and collaboration among various stakeholders. The NSFE has outlined five Cs which are Content, Capacity, Community, Communication and Collaboration.

By Chitranjan Kumar