Financial literacy is the ability to know, monitor and make effective use of all financial resources available and by the help of this ability to increase the wealth, economic security of any individual on family.

Basically the financial literacy is to know the basic details of personal finance and the possible outcomes of financial investments so that any individual can invest their money in a effective way and may get positive result.

Importance of financial literacy:

As we all know that now a day’s everyone is talking about economy and growth. If want to participate in the growth of our country then we have to understand our economy so that we may increase our wealth by our hard work as well as economy of our country.

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  • Financial literacy makes an individual more effective to make more use of available resources.
  • By the help of financial literacy, low income group people may take more benefits of the financial policies of the government.
  • Sometimes, any individual does not take actual benefit of Govt financial policies due to lack of financial knowledge. So it should be must for any individual.

RBI Initiatives for financial literacy:

Reserve Bank of India has launched “Project Financial Literacy” to spread awareness among the people. Under this project, RBI is trying to educate people by the help of posters, films, games etc.

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The main motive of this project is to save people from fraud activities and make enable people to use their money in a more efficient way. RBI has instructed all RURAL banks to open more and more financial literacy centers so that most of the people can take benefit of all the financial policies.

Why financial literacy is needed or compulsory?

  • As we all know, everyone is talking about PMJDY but how many people is actually know the all conditions of PMJDY and how to get all benefits of PMJDY by GoI. We know that there are accidental insurance and life insurance under PMJDY but how many people know that how to get that benefit and what is the actual procedure to get this benefit.
  • There is provision of over draft facility of 5000 rupees in after some certain condition. To get this benefit, we should be aware about all terms and conditions of PMJDY.
  • Some fraud companies also exist in our society, our government is trying to eradicate all this type of companies but first of all we should aware about all the things that what is beneficial to us or what is not?
  • Sometime we invest money in a scheme that may not be very fruitful to us, so if we gain some knowledge about all scheme or complete scheme details, it may be very beneficial to us.

Steps Taken towards financial literacy:

  • Many bank are appointing BCs(Business Correspondents) to grow their business as well as to educate people in financial manner.
  • BCs work for the bank and the people both. They help people to understand all the complexities of policies and help the bank to connect customers indirectly.
  • Financial Literacy centers are working to achieve complete financial literacy.
  • Many times NABARD run campaign to spread the awareness about financial literacy project.

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