effective debt restructuring plans that could include repayment of debt to informal sources, if necessary, in consultation with the bank branch. iii. specific objectives of flccs with the above background, let me remark on the specific objectives of setting up flcc. as you are aware, while the broad objective of the flccs will be to provide free financial literacy / education and credit counselling, the specific objectives of the flccs would be : i. to provide financial counselling services through face - to - face interaction as well as through other available media like e - mail, fax, mobile, etc. as per convenience of the interested persons, including education on responsible borrowing, proactive and early savings, and offering debt counselling to individuals who are indebted to formal and / or informal financial sectors ; ii. to educate the people in rural and urban areas with regard to various financial products and services available from the formal financial sector ; iii. to make the people aware of the advantages of being connected with the formal financial sector ; iv. to formulate debt restructuring plans for borrowers in distress and recommend the same to formal financial institutions, including cooperatives, for consideration ; v. to take up any such activity that promotes financial literacy, awareness of the banking services, financial planning and amelioration of debt - related distress of an individual ; flccs are not expected to act as investment advice centres / marketing centres for products of any particular bank / banks. counsellors may refrain from marketing / providing advice regarding investment in insurance policies, investment in securities, value of securities, purchase / sale of securities, etc., or promoting investments only in bank ’ s own products. iv. role of the rbi we, at the rbi, actively encourage these initiatives and one of the main reasons for my coming here to launch the trust is to demonstrate our commitment to this cause. rbi has completed 75 years and in our platinum jubilee year, we are making concerted efforts to expand the reach of formal finance through outreach initiatives. all the stakeholders are being encouraged to push aggressively for greater financial inclusion. the banking codes and standards board of india ( bcsbi ) has recently brought out an updated code to ensure that the banks formulate and adhere to their own comprehensive code of conduct for minimum standards of banking services, which individual customers can legitimately expect. and finally, the banking ombudsman scheme has been instituted for redressal of grievances against deficient banking services

my thoughts on issues and challenges that we need to address. i. financial education financial education can broadly be defined as the capacity to have familiarity with and understanding of the financial market products, especially rewards and risks in order to make informed choices. viewed from this standpoint, financial education primarily relates to personal financial education to enable individuals to take effective actions to improve overall well - being and avoid distress in financial matters. the financial markets offer a variety of both simple and complex financial products. it is difficult for the common person to grasp the downside risks associated with financial products especially if he or she is confronted by a blitz of clever advertising. making wrong choices while choosing financial products becomes one of buying in haste and repenting at leisure. the focus of any discussion on financial education is thus primarily on the individual, who usually has limited resources and skills to appreciate the complexities of financial dealings with financial intermediaries on matters relating to personal finances on a day - today basis. lack of literacy in general and financial literacy in particular, are the main hurdles in expanding the coverage of financial services to the poorer segments of society. notwithstanding the initiatives taken so far, given the large magnitude of the problem, concerted efforts need to be made in this direction. banks should, therefore, come forward to set up literacy centres and guide their clients about the features, benefits and risk of various financial products. with no well established banking relationships, the un - banked poor are pushed towards expensive alternatives. these centres can educate the people about proper financial management tools, inculcate saving habits and generate demand for financial products and services which in turn will boost financial inclusion. this process of education could benefit the banks as the centres while interacting with customers would be in a much better position to understand their specific requirements, which could then be a critical input in appropriate product design. financial education is also an integral component of customer protection. despite concerted efforts, the current levels of transparency coupled with the difficulty of consumers in identifying and understanding the fine print from the large volume of information, leads to an information asymmetry between the financial intermediary and the customer. for example, customers are often penalised for minor violations in repayments, although they have limited redressal mechanisms to rectify deficiencies in service by banks. in this context, financial education can greatly help the consumers. ii. credit counselling credit counselling can be defined as “ counselling that explores the possibility of repaying debts outside bankruptcy and educates