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Reserve Bank of India asks banks to improve pace of setting up of Financial Literacy and Credit Counselling Centres (FLCCs)

In February, 2009 Reserve Bank of India has advised banks for establishment of Financial Literacy and Credit Counselling Centres (FLCCs). FLCCs are integral to financial inclusion. The broad objective of the FLCCs will be to provide free financial literacy/education and credit counselling. The specific objectives of the FLCCs would be:

(i)To provide financial counselling services through face-to-face interaction as well as through other available media like e-mail, fax, mobile, etc. as per convenience of the interested persons, including education on responsible borrowing , proactive and early savings, and offering debt counselling to individuals who are indebted to formal and/or informal financial sectors;

(ii) To educate the people in rural and urban areas with regard to various financial products and services available from the formal financial sector ;

(iii) To make the people aware of the advantages of being connected with the formal financial sector ;

(iv) To formulate debt restructuring plans for borrowers in distress and recommend the same to formal financial institutions, including cooperatives, for consideration ;

(v) To take up any such activity that promotes financial literacy, awareness of the banking services, financial planning and amelioration of debt-related distress of an individual;

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FLCCs should not, however, act as investment advice centres /marketing centres for products of any particular bank/banks. Counsellors may refrain from marketing / providing advice regarding investment in insurance policies, investment in securities, value of securities, purchase/ sale of securities, etc., or promoting investments only in bank’s own products.

A great deal of emphasis needs to be given by all institutions to educate the public of the various schemes/ facilities. All forms of publicity, viz. press conferences, workshops, publications, websites, road shows, mobile units, village fairs, etc. should be actively explored. A suitable budget needs to be provided by all banks for the purpose. As part of ongoing measures for publicity, banks may ensure that the list of counselling centres is appropriately publicised.

In the Model Scheme, it was envisaged that in order to have maximum coverage, FLCCs may need to be set up at all levels viz. block, district, town and city levels. Accordingly banks were expected to initiate setting up of FLCCs.

However, the number of FLCCs opened in the country has been low and the pace of setting up such centres is not up to the desired extent in some States. RBI has reitrated to banks to set up FLCCs as envisaged in the Model scheme

Banknet Group has produced a CSR (social awareness) short film to encourage people from villages to open accounts with banks & to promote financial inclusion. Theme of film is “Har Ghar Mein Ho Khata (Every household needs to have a bank account). We aim to assist the industry in their Corporate Social Responsibility initiatives by coming up with relevant TVCs, short films, theatre shows & events.... Read more


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