Financial Literacy Centres in India

Financial Literacy Centres provide financial knowledge and the ability to use it for taking sound financial actions and decisions so as to help masses to access banking products and its services. RBI is making extra-ordinary efforts for eradicating financial illiteracy and in this direction, a project called “Project Financial Literacy” was been implemented.

Financial Literacy & Credit Counselling Centres (FLCCs):

• Credit Counselling is a process in which the consumers are educated about how to avoid incurring debts that cannot be repaid via face to face counselling, also on telephone, email, or through letters.
• Consumers facing problems related to credit cards, personal loans, housing loans approach these centres, to get efficient advice to solve their problems.
• It normally involves negotiating with creditors to establish a debt management plan for the consumer.
• The “ABHAY” Counselling Centre, “Disha Trust” & “Grameen Paramarsh Kendras” was started by the Bank of India, ICICI bank & by Bank of Baroda respectively.

Financial Literacy efforts of Non Governmental Organisations (NGOs)

Prominent NGO among these is named “Sanchayan” which is dedicated exclusively in spreading financial literacy by conducting free workshops on topics ranging from the basics of banking, credit cards, and PAN cards.  Especially this awareness is spread among the youth and adults who come from low income background.

Initiatives for development of FLCs

• Lead banks to set up Financial Literacy Centres (FLCs) in each of the Lead District Manager (LDM) Offices in a time bound manner.
• Setting up need based FLCs in other locations as well.
• Financial literacy activities will also be undertaken by all the rural branches of Scheduled Commercial Banks including RRBs.
• It spreads a simple messages, like Why Save, Why borrow from Banks, Why Save with banks, Why Save early in your Life, Why repay in time, Why insure yourself etc.
• The FLCs and rural branches of the banks also conduct outdoor Financial Literacy Camps with the help of experienced NGOs.
• It mainly focuses on giving simple messages of financial literacy without any misspelling for banking products and services.
• The officials working at FLCs are provided with training to enable them to work as effective trainers.
• Providing Standard financial literacy material in vernacular language for awareness and knowledge of basic banking throughout the country.
• Various representations methods to disseminate information on the basic banking products.
• Site visits by the Head/ Controlling Offices of the concerned banks to monitor the financial literacy efforts undertaken by their FLCs/Branches.
• Periodically (at least once in a year) evaluation of their literacy efforts.
• Quarterly report on the functioning of FLCs to the respective Regional Offices of RBI within 20 days after the end of each quarter.

FLCs must create awareness, provide education and training to the rural prudent customers to get access to modern banking technology based products and traditional products such as direct benefit transferring systems, Government supported development programmes. The Financial Literacy Centres should actively engage customers in the financial awareness programmes, training, education, counselling etc. to the vulnerable sections of the society.  Banking sector in India is still in developing phase, we have to go further for the fulfilment of a Financial Knowledge Society by enriching the functioning of Financial Literacy and Counselling Centres in the country.