scorecardresearchLack of financial literacy in both rural and urban population: RBI survey

Lack of financial literacy in both rural and urban population: RBI survey

Updated: 27 Dec 2022, 07:33 PM IST
TL;DR.
Financial literacy is a skill most needed in today’s times. In today’s changing world order where the focus is on greater financial security, teaching children the right way to deal with money is pertinent.
Financial literacy is important to manage finances in today's times.

Financial literacy is important to manage finances in today's times.

The Reserve Bank of India (RBI) recently carried out a pan-India "Financial Literacy and Inclusion survey" to evaluate digital banking awareness and knowledge among the country’s rural and urban population. On a score of 21, the average scored by both segments was 11.7. The survey was based on three parameters including financial knowledge, attitude and behaviour.

A detailed assessment of the scores across the various zones of the country revealed not much difference in terms of digital banking awareness and knowledge of other financial nuances, thus, highlighting how so much still needs to be done to inculcate financial literacy in people.

As opposed to the misconception of financial literacy being complex, knowing how to manage money is the essence of this subject. This also includes knowing how to effectively use financial concepts and abilities for your well-being. Not all may be aware of advanced concepts like budgeting, investing, credit and financial management. However, it is the ability to manage one’s finances that counts. Many life goals, such as retirement, education, and even travel, can be made easier with proper financial planning. The idea behind including financial literacy as a part of one’s study is to help learn economic concepts so that one may be able to handle their finances better in the future. One must master it in order to live a financially secure life.

The RBI's "Financial Literacy and Inclusion survey" shows that in the north zone, the scores in urban and rural areas were at par at 11.5 each while in the east zone, the scores were 12.1 for rural and urban areas.

In the central zone, the score for urban areas was 12.5 while it was 12.1 in the rural areas. In the west zone, the score for urban areas was 12.6 while it was 12.5 for rural areas.

In south zone, the urban area score was 11.2 and the rural area score stood at 10.3.

One may question the idea behind learning finances or ensuring financial literacy in society. If you are someone not aware of how much money you have or must have to secure your future, then taking interest in financial literacy becomes essential. Without adequate knowledge of financial literacy, one’s savings and investment actions and decisions are shaky and unsupported. Learning financial principles enables people to manage their money more effectively. It also encourages prudent financial decision-making, financial management, and financial stability

Bharatiya Janata Party MP Tejasvi Surya earlier this month urged the Indian government to introduce financial literacy study in schools and colleges to help the students and the young generation plan their future better.

Accumulating and growing wealth is a must to secure a financially happy future. With so many investment opportunities available, it is not difficult to choose the one that suits you the best if you are financially literate. 

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First Published: 27 Dec 2022, 07:33 PM IST