RBI chief Subbarao urges steps to spread financial literacy

Stressing the need for financial literacy, Reserve Bank of India governor D Subbarao on Friday sought inclusion of financial courses in the school and college curricula to improve financial literacy in the country.

After a meeting with Orissa chief minister Naveen Patnaik in Bhubaneshwar, Subbarao told newspersons that financial literacy is being pursued in Karnataka intensively on a pilot basis, and based on that experience, RBI would roll it out all over the country.

"We need to learn from experience. We are also encouraging all the states to take it up," Subbarao said. "Financial inclusion and literacy is not restricted to opening of a bank account. The account should be operative, in the sense that the account holder should be benefited going beyond deposits," he pointed out.

The account holder, he added, should get benefit by way of overdraft or credit facilities. He said he had already asked commercial banks to take necessary steps in this regard.

Subbarao, who discussed credit performance with Patnaik, said the two agreed that there is a need to increase the credit-deposit ratio. "Orissa has done well, but there is scope for improvement," he remarked. "The state government should take necessary steps in this regard through talks with commercial banks."

Patnaik on his part urged Subbarao to ensure disbursal of more soft and easy loans by commercial banks to state farmers. A string of farmer suicides has been reported from across the state lately, allegedly because of lack of access to bank credit forced them to take loans from private moneylenders at high interest rate.