Financial literacy and financial inclusion are integral to each other : Dr. D. Subbarao, Governor, Reserve Bank of India
Reserve Bank of India hosts the RBI-OECD-World Bank Regional Conference on Financial Education at New Delhi
Financial literacy and financial inclusion are integral to each other and are important because they are integral to attacking poverty. They are two elements of an integral strategy; while financial inclusion provides access, financial literacy provides awareness. This was stated by Dr. D. Subbarao, Governor, Reserve Bank of India today at the RBI-OECD-World Bank Regional Conference on Financial Education in New Delhi. The Conference has been organised by the Reserve Bank of India in collaboration with the Organisation for Economic Co-Operation and Development (OECD) and the World Bank during March 4-6, 2013. The three-day Regional Conference would present the work of the Russia/OECD/World Bank Trust Fund on Financial Literacy and Education and address specificities from India and the Asia region, notably national strategies for financial education, the measurement of financial literacy and methods for programme evaluation together with financial education for young people and women, as well as innovative delivery methods. Each session will include a discussion of case studies chosen among relevant and successful examples from Asia in particular. This conference is attended by high-level Indian, OECD and World Bank representatives, high-level officials and experts from ministries of finance and education, central banks, regulatory and supervisory authorities, officials of State governments and international organisations, the private sector, the academic and civil community as well as NGOs.
Elaborating on the role of a central bank in financial literacy, the Governor stated that an important part of the mandate of a central bank is to preserve financial stability- an essential prerequisite for financial stability is financial literacy and a central bank has a unique leverage in providing it. He emphasised that financial inclusion is good for all stake holders and explained that it is win-win for the poor, banks, government and economy. It was good for the poor as it gave them an opportunity to improve their incomes and their quality of life; it was good for the banks as it provided steady low cost savings and it was good for the government as it was a powerful tool of poverty reduction, as it also cuts down leakage; and finally it was good for the economy as it channelised savings of the poor into formal financial sector. It is not just a public good but a merit good, the Governor stated and noted that although India had many accomplishments in the area of financial inclusion, there were many challenges ahead. Good policies and effective implementation could make a big difference he said.
Earlier, Dr. K.C. Chakrabarty, Deputy Governor, Reserve Bank of India in his welcome remarks stated that the Reserve Bank of India was very proud to co-host this landmark conference, as it brought together all key stakeholders who were central to India™s crusade for achieving universal financial literacy. The Reserve Bank believed that the conference provided an ideal platform, not only for India, but also for delegates from other jurisdictions especially, the Asia Pacific Region, to exchange views and learn from the experiences of peers. Dr. Chakrabarty observed that financial illiteracy was a global problem. He hoped that the conference would succeed in valuable sharing of knowledge and experience among a wide array of experts from across the world. He hoped that with collective efforts towards universal financial education, individuals and institutions would be empowered to make informed financial choices and in the process, the global financial marketplace would become a more stable arena, much less vulnerable to financial crisis. That would be the ultimate goal of building financial capability in any society, according to him.
Speaking on the occasion, Ambassador Richard Boucher, Deputy Secretary General, OECD, remarked that the goal of policy makers was to improve the well-being of the people and empower the poor. He said that the objective of both financial inclusion and financial literacy was to improve access. Globally, the triad of Financial Inclusion, Financial Literacy and Consumer Protection had been recognised as intertwining threads in pursuit of Financial Stability and this had been endorsed by the G20 as well. He also touched upon the need for robust data for achieving meaningful financial inclusion. Congratulating India and the Reserve Bank, he said that their unique efforts would definitely improve financial inclusion.
Mr Onno Ruhl, India Country Director, World Bank in his opening remarks acknowledged the role of the Reserve Bank and the OECD in furthering financial inclusion. He said that he believed that with elements such as unique identity numbers and the Government endeavouring cash transfers directly to beneficiary accounts, India is on the eve of a major revolution in financial inclusion space. He also remarked that India was the vanguard and could get far ahead in the coming five years.
R. R. Sinha
Deputy General Manager
Press Release: 2012-2013/1479