RBI Takes First Steps to Save Consumers from Exploitative Investment Schemes
The Reserve Bank of India has taken its first step to protect consumers from exploitative investment schemes by releasing a draft National Strategy for Financial Education on Monday.
The central bank has invited comments from stakeholders and hopes the final guidelines will play a key role in financial inclusion and inclusive growth, one of the top policy priorities of the government.
"It is necessary to quickly formulate and implement a national strategy," the RBI said, as nearly half of the country's population is financially excluded. Financial literacy will help in protecting society and individuals against exploitative financial schemes, it said.
"It is easier to do business with educated customers as repayment rate improves with financial understanding," said Chandra Shekhar Ghosh, chairman and managing director of the country's largest microfinance firm Bandhan Financial Services. Ghosh deals with 38 lakh ill-informed poor borrowers across states.
In the draft report, RBI stressed on the need to impart financial education at the early stages of a person's lifecycle, as the rate of school dropout in India is high. "This is truer in case of girl students. One must keep in mind that for such students, this could be the last opportunity in life to get formal inputs on financial education."
The Central Board of Secondary Education, or CBSE, is likely to take the lead in introducing financial education in its post-primary-level curriculum. RBI prefers integration of financial education in school curriculum instead of introduction of a separate subject.
"Without a national policy, it becomes difficult to spread financial education," said Niladri Sekhor Mukherjee, managing director with Jharkahnd-based Micro Enterprises & Sustainable Project, an NGO for livelihood promotion.
"In our interactions with rural people, we found that they are keen to know on financial knowledge but the lack of it deprives them from the opportunities available in the market," Mukherjee said.
Economic Times, New Delhi, 17-07-2012