gp garg - 2014 symposium on financial education in korea
DESCRIPTION
This presentation by GP Garg was made at the High-level Global Symposium on Financial Education: Promoting Long-term Savings and Investments in Korea which explored policies and good practices for supporting long-term savings and investments through financial education and financial consumer protection. Find out more at http://www.oecd.org/daf/fin/financial-education/globalsymposiumonfinancialeducationforlong-termsavingsandinvestments.htmTRANSCRIPT
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NATIONAL CENTRE FOR FINANCIAL EDUCATIONIMPLEMENTING THE NATIONAL STRATEGY FOR FINANCIAL EDUCATION
GIRRAJ PRASAD GARG
REGISTRAR, NATIONAL INSTITUTE OF SECURITIES MARKETS
HEAD, NATIONAL CENTRE FOR FINANCIAL EDUCATION, INDIA
HIGH-LEVEL GLOBAL SYMPOSIUM ON FINANCIAL EDUCATION26-27 FEBRUARY 2014
SEOUL, KOREA
NATIONAL CENTRE FOR FINANCIAL EDUCATION (NCFE)
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IMPORTANCE OF FINANCIAL EDUCATION
NATIONAL CENTRE FOR FINANCIAL EDUCATION (NCFE)
Freedom from exploitative
financial schemes and moneylender
s
Confidence, knowledge &
skills to manage financial
products & services
Financial Inclusion and
Behavioral Change
Avoidance of over
indebtedness
Promotes entrepreneurship, saving
and investment
Reduces strain on
social programs and pension plans
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KEY COMPONENTS OF FINANCIAL EDUCATION
NATIONAL CENTRE FOR FINANCIAL EDUCATION (NCFE)
Understanding Basic Financial Concepts
Understanding the key
financial products needed
through one’s life
Making good financial choices
Developing skills, confidence and attitude towards financial risks and opportunitiesBetter Consumer Protection
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A GLOBAL EFFORT
NATIONAL CENTRE FOR FINANCIAL EDUCATION (NCFE)
According to the Organization for Economic Co-operation and
Development (OECD), National Strategy for Financial Education
promotes
A smoother and more sustainable co-operation between regulators and stakeholders
Avoids duplication of resources
Allows development of articulated and tailored roadmaps with measurable and realistic objectives based on dedicated national assessments
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CONCERNS
• Many financial institutions promoting financial education (FE) are predominantly making a product pitch
Current Practices
• No standardization of content. FE is being imparted in a variety of ways with no uniformity in the concepts being taught.
• Wholesome view needs to be taken with focus on the entire financial sector rather than small pockets.
Missing the big picture
• An emerging economy needs infrastructure to keep pace with growth. Indian households, with growing ambitions, also need a large corpus to meet their life stage goals. Both these require sustained long-term savings.
• Absence of a social security system and prevailing low insurance penetration, there is a need to promote long-term savings.
Need of long-term savings
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NSFE, INDIA
VISION: “Financially aware and empowered Indians accessing appropriate financial products and services through regulated
entities with necessary financial education and adequate grievance redressal mechanism.”
MISSION: “To undertake massive Financial Education campaign to help people manage money more effectively to achieve financial
well being by accessing appropriate financial products and services through regulated entities with fair and transparent machinery for
consumer protection and grievance redressal.”
GOALSCreate awareness and educate consumers on access to financial services, availability of various types of products and their featuresChange attitudes to translate knowledge into behaviourMake consumers understand their rights and responsibilities as clients of financial services
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IN INDIA To implement NSFE, a specialized institute, the National Centre for
Financial Education (NCFE) has been set up with the support of :
Reserve Bank of India Securities and Exchange Board of India Insurance and Regulatory Development Authority Pension Fund Regulatory Development Authority Forward Markets Commission Ministry of Finance, Government of India National Institute of Securities Markets (Implementing Body)
The Education boards are also part of the implementation process
Implementation under a technical group headed by Deputy Governor, Reserve Bank of India with representation from all the Financial Sector regulators, Government of India & Education boards. Presence of organizations of such significance shows the importance attached to financial education on the National Agenda
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APPROACH
Basic Financial Education (By NCFE)
1. Standardization of Content
2. Uniformity of the message
irrespective of the mode of
delivery
Sector-Specific Financial Education
(By respective Regulator)
1. Should be product-neutral2. Manufacturer-
neutral
Product-Specific
Financial EducationComplete
information to the customer by the
seller
For illiterates (Very Important
for any FE Program)1. Palatable
content2. Innovative
modes of delivery
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Other Ministries
FSDC
Sub-committee of FSDC
Technical Group for Financial Inclusion and Financial Literacy
Representatives from state education
departments
RBI
Basic (FE) for Adults
Sector Specific
Product Specific
IRDA PFRDASEBIMoF for facilitation / MHRD for implementation
Basic Financial Education (FE)through schools
NCFE/NISM
Maintenance of financial education website
Development of content
Research Data collection and monitoring of FE
PROPOSED STRUCTURE
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SNAPSHOT OF CURRENT ACTIVITIES UNDER NCFE NCFE – Financial
Literacy and Inclusion Survey
(NCFE-FLIS)
NCFE – Financial Education
Website (NCFE-FEW)
Financial Education
through school curriculum
NCFE – National Financial Literacy Assessment Test
(NCFE-NFLAT)
Assessment of needs through international experience
NATIONAL CENTRE FOR FINANCIAL EDUCATION (NCFE)
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ConceptInclusion in curriculum, is a long process, in the short-term students can be acquainted with the concepts of finance through this initiative. Target GroupSchool students of Classes VIII to X to assess their basic financial knowledge on topics like money, budgeting, banking, investment , insurance, retirement planning and so on. Highlights1. The test was conducted on 11th &
12th January, 2014. 2. 2000 schools & 1,00,000 students
registered3. The test would be made an annual
feature in the school calendars NATIONAL CENTRE FOR FINANCIAL EDUCATION (NCFE)
12NATIONAL CENTRE FOR FINANCIAL EDUCATION (NCFE)
NCFE- FINANCIAL EDUCATION WEBSITE
• Website Address: www.ncfeindia.org• Being developed to become a one-stop for all financial education
material.
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NCFE – FINANCIAL LITERACY AND INCLUSION SURVEY (NCFE-FLIS) Commenced a nationwide baseline survey for assessing the state of financial
inclusion and financial literacy.
Aid to assess as well as yield benchmarks of core financial literacy and
inclusion indicators at the various sub group levels and to measure its rate of
change on a continual basis to assess the efficacy of various financial
education interventions including those under NCFE.
Status: Survey report expected in August, 2014
FINANCIAL EDUCATION THROUGH SCHOOL CURRICULUM NSFE Document recognizes that students should be educated about financial
matters as early as possible in their lives. It is proposed to introduce it in an
integral manner in their school curriculum from Class VI to X.
Status: Discussions are underway
ASSESSMENT OF NEEDS THROUGH INTERNATIONAL EXPERIENCE
• Models developed by similar economies are under-study to avoid reinventing
the wheel.
ACTIVITIES UNDER NCFE
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CHALLENGES Multiple stakeholders are involved- reaching a consensus on the activities
Standardization of content across the board is critical.
Inclusion of the financial literacy material in the school curriculum is a long process. Negotiations with the education boards for the inclusion are on.
Making citizens realize importance of financial education.
India is a vast and diverse nation. Creating financial education (FE) campaigns customized for such an audience is an uphill task. Also, given the geography of the region, innovative modes of disseminating FE have to be devised
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ROAD AHEAD A comprehensive approach is being followed for the dissemination of
financial education
Joint efforts by the financial sector regulators and the Education Boards to make financial education part of school curriculum (e.g. inclusion in School Curriculum will have a snow-ball effect)
Three- tiered approach under NSFE (Basic, Sector-Specific and Product-Specific Financial Education) is being followed. Separate programs would be designed for the illiterates.
NCFE-NFLAT is proposed to be a compulsory annual test for the school students. Similar test is proposed for higher classes and college students
The Survey would be conducted every three years to understand the impact of the efforts under NCFE and to take policy decisions
Institutional Framework: The entire strategy is being implemented through existing institutional mechanism so avoid duplication of efforts.
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THANK YOU
NATIONAL CENTRE FOR FINANCIAL EDUCATION (NCFE)
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