Impact of Financial Literacy on Financial Inclusion and the Initiatives by Canara Bank Towards Spreading Financial Literacy
Abstract:
Financial inclusion has recently become the buzzword among the policymakers and bankers and in academic research. It is considered as an integral part of the efforts to promote inclusive economic growth. Financial inclusion has been the utmost priority for the government of India as well as the Reserve Bank of India. One of the executive at a prominent Public Sector Bank says, Financial Inclusion is a social obligation for the government, and social obligation, mandatory obligation as well as Business opportunity for the banks and financial institutions. Financial inclusion represents the access to safe, easy and affordable financial services for poor, vulnerable groups, disadvantaged areas for accelerated growth and for reducing income disparities and poverty.
Financial literacy is a prerequisite for effective financial inclusion, which will ensure that financial services “reach the unreached and under-reached sections of the society,” There are various reasons why people are unbanked and one of the important reason being ignorance to the major banking services and unawareness about the banking products and also unawareness about which product suits them the best It is not just imparting knowledge and information, but it plays an important role in changing the behavior with an ultimate goal to empower consumers to make informed and confident financial decisions.
In the context of 'financial inclusion ', the scope of financial education is relatively broader and it acquires greater significance since it could be an important factor in the very access of such excluded groups to finance. In countries with diverse social and economic profile like India, financial education is particularly relevant for people who are resource poor and who operate at the margin and are vulnerable to persistent downward financial pressures. Financial education can help them prepare ahead of time for life cycle needs and deal with unexpected emergencies without assuming
Financial inclusion has recently become the buzzword among the policymakers and bankers and in academic research. It is considered as an integral part of the efforts to promote inclusive economic growth. Financial inclusion has been the utmost priority for the government of India as well as the Reserve Bank of India. One of the executive at a prominent Public Sector Bank says, Financial Inclusion is a social obligation for the government, and social obligation, mandatory obligation as well as Business opportunity for the banks and financial institutions. Financial inclusion represents the access to safe, easy and affordable financial services for poor, vulnerable groups, disadvantaged areas for accelerated growth and for reducing income disparities and poverty.
Financial literacy is a prerequisite for effective financial inclusion, which will ensure that financial services “reach the unreached and under-reached sections of the society,” There are various reasons why people are unbanked and one of the important reason being ignorance to the major banking services and unawareness about the banking products and also unawareness about which product suits them the best It is not just imparting knowledge and information, but it plays an important role in changing the behavior with an ultimate goal to empower consumers to make informed and confident financial decisions.
In the context of 'financial inclusion ', the scope of financial education is relatively broader and it acquires greater significance since it could be an important factor in the very access of such excluded groups to finance. In countries with diverse social and economic profile like India, financial education is particularly relevant for people who are resource poor and who operate at the margin and are vulnerable to persistent downward financial pressures. Financial education can help them prepare ahead of time for life cycle needs and deal with unexpected emergencies without assuming
References: • Financial Inclusion and Beyond: Issues and Challenges: N.K. Thingalaya, Moodithaya, Shetty • Rangarajan, C(2008), Report of the committee on financial Inclusion in India, New Delhi, GOI. • The websites of RBI and Nabard • Thorat, usha (2008). “Financial Inclusion and Information Technology, RBI bulletin, October, Mumbai. • Agarwal, Gaurav, (2007), “Financial Inclusion through mobile phone banking, issues and challenges, CAB Calling, July-September. • Dr. K.C.Chakrabarty, Deputy Governor, RBI, “ Pushing Financial Inclusion – Issues, Challenges and Way Forward” • www.grameen-info.org • www.rbi.org.in • www.canarabank.com • www.wikipedia.com