Jan Dhan Yojana boosts financial literacy to 27% – Times of India

Mumbai: India has made a big jump in financial literacy since basic savings bank accounts were launched for all in 2013. However, the percentage of people who tick all the boxes when it comes to financial knowledge, behaviour and attitude is still only 27% as compared to 20% in 2013.
According to the findings of a survey conducted by the RBI, financial literacy is higher among men compared to women, with 29% of males polled qualifying on all fronts as against 21% for females. When compared to 2013, there has been a general improvement in financial literacy across all ages, geographies and occupations. The only category where it has deteriorated is in the income group of over Rs 10 lakh and above where 40% of those polled crossed the minimum threshold score as against 47% in 2013.
Among regions, financial awareness is highest in the west followed by the northeast with central India having the lowest financial literacy. In occupation groups, salaried government employees have the highest level of financial literacy followed by private-sector employees, then by urban self-employed. Incidentally, financial awareness is highest in the 18-29 age category (30%), and then decreases with age.
The survey uses a global definition of financial literacy that takes into account responses in respect of three components — financial knowledge, financial behaviour, and financial attitude. There is a minimum target threshold score for each of these segments.
The latest available World Bank’s Findex 2017 report had brought out that the proportion of adults with a formal account in the country has risen from 35% in 2011, to 53% in 2014, to 80% in 2017. The World Bank has also acknowledged progress in reducing the country’s gender gap in account ownership, from nearly 20% in 2014 to 6% in 2017.
Much of this has been attributed to the Pradhan Mantri Jan Dhan Yojana scheme. “In order to take forward the benefits achieved through the financial inclusion efforts, financial literacy will have to play a central role in ensuring that people use appropriate formal financial services to ensure their financial well-being,” the report said.