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Financial Literacy

●  Financial literacy is the education and understanding of various financial areas.

●  This focuses on the ability to manage personal finance matters in an efficient manner, and it includes the knowledge of making appropriate
    decisions about personal finance such as investing, insurance, real estate, paying for college, budgeting, retirement and tax planning.

●  Financial literacy also involves the proficiency of financial principles and concepts such as financial planning, compound interest,
    managing debt, profitable savings techniques and the time value of money.

●  The lack of financial literacy or financial illiteracy may lead to making poor financial choices that can have negative consequences on the
    financial well-being of an individual.

●  As per the deliberation of Sh. S S Mundra, Dy. Governor, RBI on 30 June 2015 at CAB, RBI, Pune on “Financial Education :
    Basic & Beyond”,he classified Financial Illiteracy in five (5) different categories.

●  There is a saying - “Poverty anywhere is a threat to prosperity everywhere”. Until and unless you have an inclusive society you cannot
    dream to address the challenge of poverty. Likewise, if universal financial inclusion has to become a reality, efforts to spread
    financial literacy have to be an essential pre-requisite.

The booklet FAME (Financial Awareness Messages) issued by RBI provides basic financial literacy messages for the information of general public. It contains eleven institution/product neutral financial awareness messages, such as:

  1. Documents to be submitted while opening a bank account (KYC).

  2. Importance of budgeting & Saving and Responsible Borrowing.

  3. Learn more about your deposit and your deposit accounts.

  4. Maintain a good credit score by repaying loans on time.

  5. Say Goodbye to Demand drafts and cheques and start transferring/ receiving money electronically.

  6. Banking at doorstep or at your vicinity.

  7. know how to lodge complaints at the bank & the Banking Ombudsman.

  8. There is no free lunch! Don’t get cheated.

  9. Keep in mind the following to have a hassle free ATM experience.

  10. Invest your hard earned money only in registered entities.

Mis selling- when you go to the bank to make a deposit and you come back with an insurance plan that you don’t understand.

The RBI has developed tailored financial literacy content for five target groups' viz.

  1. Farmers

  2. Small entrepreneurs

  3. School Children

  4. Self Help Groups

  5. Senior Citizens

♦  Financial Literacy material is available on RBI website under Financial Education Section.