Based on the review of progress made under the National Strategy for financial education 2013-18 and keeping in view the various developments that have taken place over the last 5 years, notably the Pradhan Mantri Jan Dhan Yojana (PMJDY), the National Centre for Financial Education (NCFE) in consultation with the four Financial Sector Regulators and other relevant stakeholders has prepared the revised NSFE (2020- 2025). RBI, SEBI, IRDAI, and PFRDA are the regulators who were involved in this exhaustive study.

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 behavior which are needed to manage their money better and plan for their future.

Let us look at the document from the following web site.

(National Strategy for Financial Inclusion 2020-2025- Creating a financially aware and empowered India)

Some introduction into why financial education and current international practices in this regard from other countries in the world.

Lessons from other countries: RBI observed that, as of mid-2018, more than 35 countries, including China, Brazil, and Indonesia have a national financial inclusion strategy.  Some common themes across these nations include: (i) following a target-based approach (by targeting specific sectors), (ii) strengthening the requisite infrastructure of payment mechanisms, (iii) strong regulatory framework, (iv) focus on last-mile delivery and financial literacy, (v) use of innovation and technology, and (vi) periodic monitoring and evaluation of progress made in financial inclusion.

Now, let us look at the experts’ report which will be explained as under:

The report is of 47 pages, 7 chapters, and 8 charts. (other than executive summary)

Though I shall give below the names of the chapters, my coverage may be a report consisting of relevant information for our primary understanding. Anyone serious about its usage must read the report several times since it involved the brains of some of the topmost bureaucrats, top regulators, best bankers, insurers and anyone linked to financial education and its application in the country. Simply, the best brains.

Chapter 1: Introduction

Chapter 2: Overview of Progress under 1st NSFE (2013-2018)

Chapter 3: Assessment of the Needs and Critical Gaps

Chapter 4: Vision and Strategic Objectives of NSFE (2020-2025)

Chapter 5: Policy Design

Chapter 6: Action Plan to Achieve the Strategic Objectives

Chapter 7: Monitoring and Evaluation.


Annex – Financial Literacy Initiatives by Stakeholders

To achieve the vision of creating a financially aware and empowered India, the following Strategic Objectives have been laid down: (from the report, reproduced)

i. Inculcate financial literacy concepts among the various sections of the population through financial education to make it an important life skill

ii. Encourage active savings behavior

iii. Encourage participation in financial markets to meet financial goals and objectives

iv. Develop credit discipline and encourage availing credit from formal financial institutions as per requirement

v. Improve usage of digital financial services in a safe and secure manner

vi. Manage risk at various life stages through the relevant and suitable insurance cover

vii. Plan for old age and retirement through coverage of suitable pension products

In order to achieve the Strategic Objectives laid down, the document recommends adoption of a ‘5C’ approach for dissemination of financial education through emphasis on the development of relevant:

Content (including Curriculum in schools, colleges, and training establishments), developing

Capacity among the intermediaries involved in providing financial services, leveraging on the positive effect of

Community-led model for financial literacy through appropriate

Communication Strategy, and lastly, enhancing

Collaboration among various stakeholders.

You are justified to ask whether any progress was done during the first period 2013-18 and also area wise in the country?

Percentage of population crossing minimum threshold score %

Particulars Years
2013 2019
Male 23 29
Female 16 21
Highest growth -Western 27 37
Minimum growth-Central 14 21
Rural 15 24
Urban 25 33
Educational level
Graduate and above 34 40
Uneducated 4 13

The statistical information explains the growth of awareness of financial education and its application over a period of 6 years in a population of 1300 plus million as of 2019.

1st NSFE taught us to learn the following programs of financial literacy to make the necessary progress:

  • Development of target-specific module and not one size fits all module
  • Contextual and vernacular approach: Nukkad Natak (street plays) stole the march over others.
  • Medium and mode of delivery: Multi-media modes like Audio-Visuals, Digital Vans (Digital financial literacy on wheels), Digital Display Systems, Kiosks, etc. have been found to be best tools for promoting digital financial literacy. Regarding mode of delivery, one-to-one learning and group training were found to be effective modes of dissemination of financial literacy messages.
  • Learning While Doing & Peer-to-Peer Learning: Learning is long-lasting when accompanied by a hands-on effort/ demonstration besides repetitive relaying of messages. For example, practical training on usage of the digital financial transactions using mobile vans (Digital Vans), etc. During our days this approach was missing.
  • Efficacy in Mass Media Outreach: Among mass media campaigns, messages broadcast through television had the highest recall among the audience. Yes, to some extent seeing is believing.
  • Rationalizing Stakeholder Collaborations: Collaboration among all the stakeholders of financial education is important. Cooperation among RBI, SEBI, Stock exchanges, and Depositories proved very effective since they are interlinked.
  • Use of Relatable Examples: Financial literacy messages when co-related with real-life events (e.g. marriage, parenting, retirement planning, asset acquisition) seem to have higher connect to various target audiences.

However, the experience showed new paths to be learned and experimented for greater success to spread financial education and its application in new financial product usage.

The new approach has learned the lessons of the old experience during 2013-18 intends to approach the following audience with the details given therein to achieve the required results.

Life Stage of Target Audience: Children, young adults, adults in the workforce, senior citizens- with special focus on women

Geography with a focus on vulnerable social groups: Rural, Urban (with focus on urban poor and migrants), Aspirational Districts, LWE, North Eastern Region (NER), Hilly States, Andaman & Nicobar Islands and Lakshadweep with focus on vulnerable social groups, migrants, persons with disabilities (Divyangjan). This is important to focus on the vulnerable social groups who did not get the required attention in the first attempt. North Eastern Region has traditionally been neglected for development and recent results indicate remarkable improvement.

Sector-specific focus: Agriculture, Manufacturing (Skilled/Unskilled laborer’s/artisans under MSME Sector, members of SHGs), Self Employed/ Unorganized sector.

Note: A lot of efforts have gone in identifying the above strategic groups which have always been neglected for financial education which resulted in negligible benefits for these groups.

One has to recollect Pradhan Mantri Jan Dhan Yojana (PMJDY) which broke the traditional myth of bankers with one size fits all approach or trickle-down theory which has been used since independence. Bankers in spite of nationalization and widespread of their operations did not consider modern financial education as fit for various groups that have been identified in the earlier parts.

As a senior banker with decades of experience and now retired, I humbly salute this path making attempts to tear the rural veil for development.

There is no doubt that a ‘5 C’ approach would be adopted for the dissemination of financial education among identified groups.

Now to the crux of the issue of how to educate financial knowledge and include practical usage of modern techniques?

Sector-specific financial education is being imparted by the Financial Sector Regulators and focuses on “What” of the financial services and the contents cover awareness on ‘Do’s & Don’ts’, ‘Rights & Responsibilities’, ‘Safe usage of digital financial services’ and approaching ‘Grievance Redressal’ Authority. Basic and Sector-specific education will empower a person to be more prudent and make informed decisions while choosing appropriate financial products as per his/ her requirements from the available alternatives. All under specific regulators are used to impart the above instructions.

I never had an actual process education as a subject though my experience and actual handling, we the bankers were forced to learn and apply.

However, Process education is crucial to ensure that knowledge translates into behavior.

As an illustration, some of the aspects to be covered include:

  • How to use an ATM card?
  • How to do a UPI Transaction?
  • How to deposit money with a BC?
  • How to fill a loan application form?
  • How to compare and select an appropriate loan product?
  • How to purchase an insurance cover?
  • How to do various transactions in securities markets?
  • How to allocate funds in a pension plan, how to lodge a complaint with a financial service provider, and how to approach an ombudsman/grievance redressal authority?

Bankers through various audio-visual media like a documentary, physical explaining by bankers themselves (most of them being educated and highly motivated), and also extensive usage of apps developed/to be further enlarged by bankers themselves or executives from other relevant sectors.

Agriculture has shown the enormous usage of modern technology/usage of phones for education or clarifications from agricultural experts by agriculturalists and even agricultural laborers for the marketing of their produce. We were recently shown how modern tools have been helping agriculture to break old habits of only relying on the government to purchase their products and use transport means to market other places for more profits.

Chapter 6 gives an Action Plan to achieve the strategic objectives explained so far. One can refer to the chapter for more information.

Who are the identified stakeholders in achieving financial education through the detailed strategies explained so far?

Let us look at the detailed list.

i. Government of India: Department of Financial Services (Ministry of Finance), Ministry of Electronics and Information Technology, Ministry of Rural Development/ National Rural Livelihood Mission, Ministry of Urban Affairs and Poverty Alleviation/ National Urban Livelihood Mission, Ministry of Human Resources Development, Ministry of Corporate Affairs, Ministry of Skill Development and Entrepreneurship, Ministry of Health and Family Welfare, Ministry of Women and Child Development, Ministry of Information and Broadcasting, Ministry of Panchayati Raj, Ministry of Social Justice and Empowerment

ii. Financial Sector Regulators: RBI, SEBI, IRDAI, and PFRDA

iii. National Centre for Financial Education (NCFE)

iv. Development Financial Institutions: NABARD and SIDBI

v. Industry Associations: IBA, AMFI, FEDAI, BCFI

vi. Securities Market Institutions Infrastructure: Stock Exchanges, Depositories

vii. Payment Institutions: NPCI

viii. Investor Education Institutions: IEPFA, IICA, etc.

ix. Financial Service Providers: Banks, Insurance Companies, Mutual Fund Companies, Pension Funds, Stock Exchanges and Depositories, Non-Banking Financial Companies, Fin-tech companies, etc.

x. Self-Regulatory Organizations (SROs): FIDC, M-Fin, Sa-Dhan, etc.

xi. State Rural Livelihood Mission (SRLM) of all states.

Who is going to monitor and evaluate the progress?

The Technical Group on Financial Inclusion and Financial Literacy (TGFIFL) (Chair: DG, RBI) shall be responsible for periodic monitoring and implementation of the National Strategy for Financial Education. There would be periodic monitoring of the activities undertaken by various stakeholders for the dissemination of basic, sector-specific, and process literacy.

A Digital Repository to collect information on various financial literacy activities undertaken by the stakeholders shall be prepared.

A Mid-term Evaluation shall be undertaken at the end of three years of Strategy implementation (2022-2023).

 A comprehensive National Survey at the end of the Strategy implementation period shall be undertaken in 2025.


Unless financial education and resultant usage of financial products of all types are spread across the nook and corner of our nation which is the youngest nation in the world, the economic growth of our expectation will never be reached. It is interesting to note from the above discussion that we are on the path of discovering the financial strength of our nation by actual usage of financial products by all, not necessarily by the educated and well off of this nation.

The recent recovery in rural areas after the massive economic loss indicates that the time has come to spread financial education by all available means, involve international bodies like OECD, World bank, and engage our highly educated youth in this nation-building of financial literacy. Complete details of all stakeholders noted above will be monitored for their contribution and ask to account for their contribution to nation-building by spread of financial literacy.

Disclaimer: The views expressed in the article are mine and neither nor the government of India/RBI is responsible for them. Kindly refer to the web site for full information.

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Qualification: Post Graduate
Company: subramanian natarajan cpa firm
Location: NEW DELHI, Delhi, India
Member Since: 09 May 2017 | Total Posts: 183
A banker with 27 years of experience, a CPA from USA with specialization in US taxation, individual, partnership, S corporation or LLC taxation etc View Full Profile

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