RBI asks state-level bank committees to spread financial literacy

The SLBCs have also been asked to conduct publicity drives on banking- related subjects at regular intervals. The report advises banks to come out with small publications in various local languages on financial literacy. SLBCs have been asked to start their own websites for the benefit of common man in local languages.

Now,the state government machinery has also been asked to support effort made by banks for financial literacy,The support is elicited especially at the grassroots level like panchayats and schools for imparting financial literacy.

In a bid to take such drives beyond websites,the report has directed SLBCs to use local media,especially newspapers,on matters like opening of bank accounts and RBI instructions on lending,etc. in a language easily understood by common man.

M K Jain,the general manager of Dena Bank,the SLBC convener in Gujarat,said when the final report would come out,the matter would be placed before the SLBC meeting and the suggestions made in that report would be implemented.

Acting on the recommendations in this regard by a working group two years ago,the banks did set up FLCCs but they did not move beyond being an extension of branches where the concerned banks ended up selling their own products and services.

The RBI has taken a serious view of this situation wherein banks also used their existing branch network and personnel for these centres,and converting them as an extension of branches instead of providing guidance to debtors. Detailed guidelines have been issued to correct this situation now.

The task has been cut out for banks in rural and urban areas. While regional rural banks and nationalised banks have been asked to open financial literacy and credit counselling centres in rural areas with focus on farming communities,foreign banks and private sector banks have been told to open such centres in urban areas and deal with issues like credit card over-dues,home loans and personal loans.

RBI has told banks that they may encourage their own customers in distress or customers of any other bank to approach the FLCCs set up by them so that timely intervention can help arrest further financial deterioration of the borrower. Debt management plans can also be worked out for distressed borrowers by facilitating restructuring or rescheduling their debts.