Coordinated efforts needed to spread financial inclusion: S S Mundra

The RBI deputy governor stresses on strong co-relation between financial inclusion, financial literacy and consumer protection to ensure stability of financial system

Reserve Bank of India Deputy Governor S S Mundra has stressed the need for financial inclusion as a means to address the issue of poverty. He also stressed on the strong co-relation between financial inclusion, financial literacy and consumer protection to ensure the stability of the financial system.

"If universal financial inclusion has to become a reality, efforts to spread financial literacy have to be an essential pre-requisite," said Mundra at the conference on financial literacy organised by College of Agriculture Banking at Pune.

He stressed the need for coordinated efforts from various agencies - the government, financial institutions, industry, consumer associations and mass media.

"The level of awareness about simple things like need for timely payment of the bills, credit card dues etc. is absolutely low. People aren't really aware about the penalties that they might end up paying for their failures to make timely payment of bills/credit card dues. Not only the penalty could be severe, even more importantly, the bad credit behaviour can feed into their credit history with credit bureaus which can serve as an impediment for their future credit requirement. These are the areas on which the literacy efforts for this group should focus on," suggested Mundra.

Apart from low level of financial literacy, low social and technological inclusion, hesitation to use new technology like ATMs, mobile etc and low level of financial literacy are impediments in achieving universal financial inclusion, said Mundra.