deepali pant joshi : moving financial capability forward – innovation scale and impact intervention by dr deepali pant joshi, executive director of the reserve bank of india, at the 10th anniversary of the citi - ft financial education summit, hong kong, 7 december 2013. * * * inputs from sushma vij dgm and geetha nair agm are gratefully acknowledged. dear friends, i am honoured to be here today at the tenth anniversary of the summit on financial literacy and thank citi and ft for having me here, and of course, my friend david pilling for the opportunity to share the india experience. david we are out of the woods! i confirm this. as all the people in this room know, financial literacy has emerged as a focus area for policy makers all across the globe, in the wake of the global financial crisis. financial literacy means different things to different people. we in india understand financial literacy differently depending upon the underlying objective to build greater financial inclusion through financial literacy, for maximising welfare, both individually and for society generally. although, we have progressively promoted financial literacy, many challenges remain. these include ( i ) the large excluded sections many of whom may be illiterates especially in the rural or remote areas with difficult physical access ; ( ii ) the need for better supervisory capacity among financial regulators ; and ( iii ) addressing the pervasive “ informal ” markets that handle lending, insurance, and remittances for those unable to tap into the formal system. this is a tenth anniversary of the summit. in these ten years, india has seen significant changes. as you know, we have a large banking system which comprises besides public sector banks, private sector banks, regional rural banks and cooperatives with significant penetrative outreach. well, these banks are now all on interoperable core banking system platforms which enables us to significantly leverage technology to leapfrog the barriers of geography and distance and tackle issues of voluntary access. we have significantly liberalised our rules on bank branching, we have enabled the use of banking correspondents ( bcs ), some of the mobile companies, such as, airtel and vodafone, partner with banks as bcs. we have also liberalised the dreaded kyc norms to make it easier for a poor person or a migrant to open a bank account. we have enabled e - kyc. our unique identity card, the aadhar, is enabling digitisation of social benefit transfers which will

’ s national program for it ground to a halt after pilot sites reported significant problems. already four years behind schedule, the initial pilot released in london was branded as shambles, as failure to address the culture change issues, coupled with “ technical faults ” to produce weeks of chaos at hospitals. after several months of working on the problems, the rollout was placed on hold and in sep 2010, department of health announced that efforts to centralize health records were abandoned. over the years many studies have shown high failure rates in the it sector. as per a 2008 study by us government accounting office ( gao ), of 840 federally funded projects 49 % of were poorly planned, poorly performing or both. a 2008 study by the information systems audit and control association that found that 43 % of 400 respondents admitted that their organization had a recent project failure. ( source – the story behind the high failure rates in the it sector ). a 2002 gartner survey found that 20 percent of all expenditures on it is wasted – a finding that represents, on a global basis, an annual destruction of value totaling about us $ 600 billion. a 2004 ibm survey of fortune 1000 cios found that, on average, cios believe that 40 percent of all it spending brought no return to their organizations. a 2006 study conducted by the standish group found that only 35 percent of all it projects succeeded while the remainder ( 65 percent ) were either challenged or failed. many surveys have consistently revealed that 20 to 70 percent of large ‐ scale investments in it ‐ enabled change are wasted. indian context before coming to some conclusions from the above incidents and survey reports let us come to the indian context, where banking has traversed a long journey from the days of mechanization, followed by word processing on standalone pcs onto it based applications. as things stand today the customer related functions in banks are all run on it enabled systems. it is the reach and capacity of information technology that has enabled banks to overcome the constraints of geographical reach, enormously increasing transaction volumes and, to an extent, availability of human resources. banks are gearing up to cater to fast increasing customer needs through it based payment systems, internet based access and technology enabled service delivery modes. while banks keep churning out new projects, an important key to the success of any project / software is exception handling. while routine transactions generally go well executed, it is the exception handling that makes or breaks the software. while testing the software, adequate efforts should be made to prepare exhaustive