Page 49 - Banking Finance July 2023

ARTICLE

Introduction Importance of Financial Literacy in India
Financial literacy is the ability of a person to effectively Financial literacy is one of the biggest assets of any country
manage variety of financial skills, such as personal finance as it is directly proportional to the economic growth. The
management, budgeting, and investing. In India, the need significance of financial literacy in India are as follow:
for financial literacy is necessary as the education level of Development of rural areas: Reaching out to rural
Indians is low and large section of the population is still sections and working on their development can be
outside the formal financial system. Financial literacy is a achieved through financial literacy. This can be achieved
precondition for success of Financial Inclusion. by making people more aware about the available
resources and right way of utilizing them.
For effective Financial Inclusion, Financial Literacy is
Ease in borrowing: Many people borrowed money from
essential to ensure financial services reach the unreached
informal sources and pay higher interests. Financial
& under-reached section of the Society. Government of India
education can help poor people to make informed
along with various regulators are constantly working
decisions and make the best use of available resources.
towards growth by implementing financial literacy courses,
Ease in doing business transactions: The launch of
workshops and schemes.
Pradhan Mantri Jan Dhan Yojana has led opening of
many new Savings Bank accounts. These accounts have
About the author led to an ease in doing business as well as personal
transactions to a great extent.
D. Surendranath
Growth of MSMEs: MSMEs contribute to 29% of
Chief Manager
India's GDP with 50% of exports coming from this
Union Bank of India
Staff College, Bangalore sector. Financial literacy can help small businesses to

44 | 2023 | JULY | BANKING FINANCE