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Financial Literacy

Financial Literacy. Definition. SKILL Smart decision with money in hand. People knows their way around their BUDGET. Why study financial literacy?. The state says we need to ! The number of foreclosures and bankruptcies are increasing . Credit card use has gotten out of control.

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Financial Literacy

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  1. Financial Literacy

  2. Definition • SKILL • Smart decision with money in hand. • People knows their way around their BUDGET.

  3. Why study financial literacy? • The state says we need to! • The number of foreclosures and bankruptcies are increasing. • Credit card use has gotten out of control. Video • You have the chance to be smart with your finances!

  4. Concepts • Budget • Emergencies • Debt

  5. What do you need to know before Investing • Compound Interest • Diversification • Risk Vs. Reward • Financial Market

  6. So….. • Start Early • Invest Regularly • Be Patient

  7. Diversification • Don’t put all eggs in one basket

  8. Ways of Diversification • Investment Type • Maturity • Industry • Geography

  9. Risk Vs. Reward

  10. Contd.. • No Risk • High Returns

  11. Financial Markets • A market in which financial assets are purchased or sold

  12. Money Market Instruments

  13. Capital Market Instruments

  14. Think Before you Invest Famous Financial Scams in India • HarshadMehta Case • Fooled many investors • Initiated a scam • Diverted funds about 5000 crores from the Banks to stockbrokers • Ketan Parekh • Bought shares in fictitious names from Allahabad Stock Exchange and Calcutta Stock Exchange • CA and run a family business • Satyam Scam - Company’s Chairman confessed that he manipulated accounts

  15. Contd.. • RoopBhansali Scam - CRB was once a top Investment firm started by CR Bhansali • He collected money from investors by way of mutual funds, FD and debentures • Transfered to another company • Subrata Roy • Sahara India Pariwar Investor • Failed to return 24000 crore plus interests to its investors as directed by Supreme Court • Saradha Chit Fund Scam - West Bengal and Odisha • HSBC case of Suchitra Krishnamurthy, PNB Case, Vijay Mallya -

  16. Financial Literacy across the Globe

  17. State wise Financial Literacy in India

  18. Contd..

  19. Targets for Literacy • Rural • • Urban poor • • Children/ students • • Women • • Senior citizens

  20. Mantras • Don’t Lose money • Insure – To secure your future • Avoid Credit traps • Focus on safe financial products

  21. RBI Initiatives for Financial Literacy • Multilingual RBI website for the Common Person • – In 13 languages; Financial Education page on RBI’s website • • Multi-lingual reading material • – Comics books (Raju and Money Kumar series), • Educational games - Comic books are becoming popular among children and even among grownups • • Awareness programmes • Films, skits, road shows

  22. Contd.. • Participation in exhibitions - stalls on financial education • – Financial Education camps in remote places - Outreach visits – Essay/Quiz competitions; • Visits to RBI by school children • – Financial Counselling & Literacy Centres • – Talks on Radio/Television

  23. Measure your Financial Literacy Level • Questionnaire

  24. Inference • Score Range Inference • 0 to < 5 The financial literacy level of the individual is assumed to be basic • 5 to < 8 The individual has intermediate knowledge of financial instruments • 8 to 10 A score in this range depicts advanced financial knowledge.

  25. Web Portal • Rbi.org.in • Pgportal.gov.in

  26. Few MOOC Courses on Financial Literacy • https://www.coursera.org/courses?query=financial%20literacy • https://blog.edx.org/personal-finance-courses-improve-your-life • https://www.ccfeducation.org/financial-literacy-courses-online/ • https://swayam.gov.in/courses/public • https://www.open2study.com/subjects/financial-literacy-010713

  27. References https://www.rbi.org.in/scripts/SearchResults.aspx?search=financial%20literacy • https://www.sebi.gov.in/media/press-releases/apr-2017/students-can-take-financial-literacy-tests-throughout-the-year-shri-ajay-tyagi_34738.html • https://www.livemint.com/Money/2l9bZsVo7eempRU9yLvPAL/SP-survey-More-than-70-Indians-fare-badly-in-financial-li.html • https://www.moneylife.in/article/hsbc-loots-suchitra-krishnamoorthi-after-big-promises-of-24-percentage-returns/24975.html • https://www.nefe.org/What-We-Provide/Primary-Research/Effect-of-Financial-Literacy-on-Financial-Behavior • https://www.nber.org/papers/w15352.pdf • https://onlinelibrary.wiley.com/doi/pdf/10.1111/ijcs.12408 • https://www.researchgate.net/publication/267641595_A_Literature_Review_On_Financial_Literacy • https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515891 • https://www.organismocf.it/c/document_library/get_file?uuid=a1138bb4-92b2-43ad-8a36-ffe716c858b2&groupId=10122 • https://www.financialeducatorscouncil.org/financial-literacy-statistics/ • https://www.forbes.com/sites/danipascarella/2018/04/03/4-stats-that-reveal-how-badly-america-is-failing-at-financial-literacy/#529eaabc2bb7 • https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5450829/ • Source- Data Complied from the National Centre for Financial Education Report

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