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Class 8 and 9 students at 26 schools all over the country are taking lessons in investor education these days, courtesy the capital market regulator. The optional three-month course teaches these students the importance of money, how to manage it and concepts of budgeting and saving.

Last month, 720 of these students received certification (of 3,000-odd who participated in the special programme). The initiative follows the Securities and Exchange Board of India’s decision to facilitate financial literacy to children before they complete their secondary education. The regulator feels catching them young is the only way of increasing the number of households investing in the equity market. The number is paltry, even after decades of a free capital market.  Consumer Pyramid, a survey of 120,000 households done by the Center for Monitoring Indian Economy (CMIE), showed only 6.5 per cent of Indian households invest in shares and only 1.12 per cent of the total savings flow into listed shares and mutual funds.

Sebi is implementing the financial literacy programme through the National Institute of Securities Markets (NISM), set up by the regulator to improve the quality of the market through educational initiatives. A pilot project called the School Financial Literacy Programme is being supervised by the National Progressive Schools Conference. Of the 26 schools, 13 are from north India, 11 from the south and two from the east. The plan is to extend this programme shortly to 110 schools in New Delhi, covering 15,000 students. NISM is also conducting teachers’ training programs in conjunction with the
Rotary Club of Calcutta South West.

Sebi Chairman C B Bhave said the definition of financial inclusion is different for the banking and security markets. “If a person has a bank account, it is inclusion from the banking sector’s perspective. But, all citizens cannot be asked to buy shares. If he cannot buy risky assets, he will be advised to buy fixed income securities.” The regulator has also been talking to the Central Board of Secondary Education to introduce a course for financial literacy at the school level. Efforts are on to introduce a course in Marathi and talks are
on with the Maharashtra government in this regard. If it succeeds, other regional language courses will be on.

Mahesh Vyas, Managing Director & CEO, CMIE, said: “It is imperative that we take basic financial services to the masses, as only 40 per cent of the population between the age of 25 and 75 years is financially included in the sense of having a bank account or an insurance policy or a demat account or a debit/credit card.

It is important that basic financial education is integrated with basic education to ensure this education permeates deep and is not mixed with the marketing efforts of financial intermediaries.”


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June 2024