RBI governor asserts financial inclusion poised to grow in India

He also highlighted the RBI's and government's role and steps required for enhancing financial inclusion and education.

New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das on Wednesday said financial inclusion in the country 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.

He also highlighted the RBI’s and government’s role and steps required for enhancing financial inclusion and education.

---

Das opined that financial education is one of the strategic pillars, which sets the broad context for the National Strategy for Financial Education (2020-2025) having an ambitious vision of creating a financially aware and empowered India.

RBI Governor made these remarks on Wednesday while delivering the keynote address at the webinar on ‘Investing in Investor Education in India: Priorities for Action’, which was organised by National Council of Applied Economic Research (NCAER), New Delhi.

Das termed this year as an “unprecedented year in terms of loss of lives and livelihood and the way of living in general” and said “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 governor asserted that a number of steps have been taken by the government and the RBI for financial inclusion, which resulted in bringing large and hitherto excluded, sections of the population into the formal financial fold.

Das said financial inclusion initiatives in India started in the aftermath of first All India Rural Credit Survey in 1954 with promotion of cooperatives, followed later by expansion of branch network after nationalisation of major private sector banks, launch of Lead Bank Scheme, promotion of Self Help Groups, Joint Liability Groups, implementation of banking correspondents model, expansion of banking outlets, creation of payments banks and small finance banks.

He said the largest impact in recent years came from the opening of Jan Dhan accounts and the implementation of the Pradhan Mantri MUDRA Yojana (PMMY).

Further, he said the launch of Pradhan Mantri Jan Dhan Yojana (PMJDY) in 2014 has resulted in almost every household having access to formal banking services along with a platform for availing low value credit, insurance and pension schemes.

“This has been ably supported by initiatives to ensure last-mile delivery of banking services through innovative banking channels like the BC Model. Thanks to technology, there has been massive improvement in deepening of digital financial services. The Jan Dhan, Aadhaar and Mobile (JAM) ecosystem has made a significant difference in the universe of financial inclusion,” Das added.

RBI Governor highlighted that several initiatives have been taken for the creation of enabling digital infrastructure at the ground level and accelerate the progress towards universalising digital payments in a convenient, safe, secure and affordable manner.

Das informed that the Financial Stability and Development Council (FSDC) approved the National Strategy for Financial Inclusion (NSFI) document, which was launched by RBI earlier this year on January 10, 2020.

He said with financial education, there is a need for financial education and to achieve these multiple objectives, several steps have been taken.

“The National Centre for Financial Education (NCFE) has been set up by the four financial sector regulators as a Section 8 (Not for Profit) Company to promote financial education across India for all sections of the population as per the National Strategy for Financial Education (NSFE). NCFE undertakes financial education campaigns across the country through seminars, workshops, conclaves, training programmes, campaigns, to help people manage money more effectively and achieve financial wellbeing in the process,” he said.

Financial education is one of the strategic pillars, which sets the broad context for the National Strategy for Financial Education (NSFE) (2020-2025).

“The NSFE (2020-2025) has set an ambitious vision of creating a financially aware and empowered India. It focusses on various aspects of financial education across banking, insurance, pension and investments through greater role for financial institutions (both banks and non-banks), educational institutions, industry bodies and other stakeholders,” he said.