Print Friendly, PDF & Email

National Strategy for Financial Education 2020-2025 (NSFE)

Topics Covered: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

National Strategy for Financial Education 2020-2025 (NSFE):


Context:

The Reserve Bank of India has released a national strategy for financial education to be implemented in the next five years.

  • The multi-stakeholder led approach is aimed at creating a financially aware and empowered India.
  • It is the second NSFE , the first one being released in 2013.

Basic objectives:

The objectives include managing risk at various life stages through relevant and suitable insurance cover besides planning for old age and retirement through coverage of suitable pension products.

Who prepared it?

The NSFE has been put together by the National Centre for Financial Education (NCFE) in consultation with the four financial sector regulators (Reserve Bank of India, Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India and Pension Fund Regulatory and Development Authority) and other relevant stakeholders.

Highlights of NSFE: 2020-25- Key recommendations:

  1. Adopt a ‘5 C’ – Content, Capacity, Community, Communication and Collaboration – approach to achieve the financial well-being of all Indians.
  2. It has suggested financial literacy content for school children (including curriculum and co-scholastic), teachers, young adults, women, new entrants at workplace/ entrepreneurs (MSMEs), senior citizens, persons with disabilities, illiterate people, etc.
  3. Capacity development of various intermediaries, who can be involved in providing financial literacy.
  4. Develop a ‘Code of Conduct’ for financial education providers.
  5. Community-led approaches should be evolved for disseminating financial literacy in a sustainable manner.
  6. A specific period in the year needs to be identified to disseminate financial literacy messages on a large/ focused scale.
  7. Integrate financial education content in the school curriculum, various professional and vocational courses (undertaken by the Ministry of Skill Development and Entrepreneurship) through their Sector Skilling Missions and B.Ed./M.Ed. programmes.
  8. Adopt a robust ‘Monitoring and Evaluation Framework’ to assess progress made under the strategy.

Significance and expected outcomes:

The strategy seeks to develop credit discipline and encourage availing of credit from formal financial institutions as per requirement.

It wants to improve usage of digital financial services in a safe and secure manner.

The document wants management of risk at various life stages through relevant and suitable insurance cover and plan for old age and retirement through coverage of suitable pension products.

About NCFE:

National Centre for Financial Education (NCFE) is a Not for Profit Company promoted by Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI) and Pension Fund Regulatory and Development Authority (PFRDA).

Sources: the Hindu.