Reserve Bank mulls financial education fund

Reserve Bank of India has mooted a depositor protection fund (DPF) for imparting financial education and counselling to the general public.

Financial education is about building capacity in an individual to become familiar and understand the of financial products, especially risks and rewards associated with them to make an informed choices, according to RBI. It aims to enable individuals to take effective steps for improving overall well-being and avoid distress in financial matters.

The RBI is exploring prospects for instituting DPF which could be utilised towards generating greater awareness for the common man on issues relating to financial education and counselling, RBI governor Y V Reddy, said in his inaugural address at the International Conference on Financial Education organised by OECD and co-hosted by Pension Fund Regulatory and Development Authority at New Delhi today.

This (fund) could be complemented with providing greater role to RBI's regional offices to promote financial education in their respective jurisdictions, he added.

RBI wants to advance the cause of financial education in our country as part of an overall strategy. Concerted efforts are underway to expand the reach of formal finance in the light of recent emphasis on financial inclusion, he said.

At the same time , a process of credit counselling is being encouraged help all borrowers, especially those in distress to overcome current financial problems and gain access to the structured financial system.