, educational institutions, ngos, financial sector entities, multilateral international players and the government at both centre and state. 14. banks and financial literacy • we have advised banks that there should be at least one financial literacy centres ( flc ) in all the districts ( 640 + ) throughout the country. these flcs are required to conduct outdoor financial literacy camps at least once in a month. banks have already set up about 650 flcs till date. • further, every rural branch ( 35000 + ) is required to conduct a financial literacy camp at least once in a month. through these camps, we envisage imparting of financial literacy in the form of simple messages like why save with banks, why borrow from banks, why borrow as far as possible for income generating activities, why repay in time, why insure yourself, why save for your retirement etc. • starting from april 2012, we have been able to educate about 1 million plus people through these literacy programs. 15. our strategy on financial inclusion and financial literacy • bank led model • more by moral suasion by asking banks to see their enlightened self - interest, than by regulation • let a thousand flowers bloom! 16. fips prepared and implemented by banks. why not a more prescriptive model? ( i ) innovative ideas ( ii ) tailored to their business model ( iii ) ownership of the plan ( iv ) india a diverse country. let a thousand experiments take place. 17. many accomplishments • some of it in numbers • some of it in heart - warming stories that we have heard from across the length and breadth of the country • villages now having access to banking – 200, 000 / 600, 000 through branches + bcs bis central bankers ’ speeches • hundreds of millions of people, often illiterate, use smart cards with biometric identification, for bank transactions ( secretary geithner ) • tens of millions of people use mobile handheld electronic devices for banking • 10 million shgs across the country are credit linked to banks for income enhancing activities • villages ask for bank branches as they ask for schools and health centres [ neighbouring villages of jalanga ] • women voluntarily forming shgs • outreach programmes – more than 50 % of participant attendees are women • ebt – in several states • direct cash transfer in 50 districts 18. challenge for rbi • banks see this as an obligation and not an opportunity • kyc ( migrant labour ) and uid – simplifying without compromising security •

• the stereotype view is that the poor are carefree or incompetent. perish that thought. they are anything but. ( vi ) poor economics – abhijit banerjee & esther duflo ( i ) why are the poor simultaneously saving and borrowing at the same time? ( ii ) why in some countries, the poor actually pay money to save money – i. e. they actually accept ( - ) ve interest rate ( iii ) ernakulam – survey. dependence on money lenders. ( iv ) seemingly irrational behaviour tells us a lot about how financial inclusion should be pursued. 22. fortune at the bottom of the pyramid shibboleth or cliche • fortune at the bottom of the pyramid is indeed there • astounding success of millions of shgs across the country – a heart warming success story • nascent capitalist inside every poor man and poor woman. capitalists without capital as banerjee and duflo call them. • the abundance of entrepreneurism among the poor is the least recognized part of our understanding. • purely in terms of stated occupations, most income groups in poor countries seem to be more entrepreneurial than their counterparts in the developed world – the poor no less so than others, an observation that inspired harvard business school professor tarun khanna ’ s book, billions of entrepreneurs. financial literacy and inclusion – challenge not unique to developing countries 23. economist a couple of weeks ago. feature on “ life on the edges of america ’ s financial mainstream ”. • in december 2012, the federal deposit insurance corporation ( fdic ) released a survey that found roughly one in 12 american households, or some 17m adults, are “ unbanked ”, meaning they lack a current or savings account. bis central bankers ’ speeches • the survey also found that one in every five american households is “ underbanked ”, meaning that they have a bank account but also rely on alternative services – typically, high - cost products such as payday loans, cheque - cashing services, non - bank money orders or pawn shops. • not all the unbanked are poor, nor do all poor people lack bank accounts. but the rate of the unbanked among low income households ( defined in the fdic survey as those with an annual income below $ 15, 000 ) is more than three times the overall rate. disturbing questions about financial literacy 24. [ economist ] – financial literacy • here is a test. suppose you