If finance’s Greek to you, comic relief’s on the way

MUMBAI: Imagine the likes of Tintin and Asterix decoding the difference between fixed and floating home loan rates to you.

Sounds funny? If the Reserve Bank of India (RBI) has its way, financial literacy may be ushered in through an unusual but unique medium - comics. Taking a cue from the US Federal Reserve’s website, which has “128 comic books” to simplify financial terminology and processes, RBI deputy governor V Leeladhar on Monday exhorted banks to bring out illustrative comics to improve financial literacy.

RBI has written to heads of banks asking them to bring out short illustrative comics that will explain various issues including inflation to the lay man. The books will also attempt to illustrate processes involved in opening bank accounts and using electronic remittance, among others.

But the central bank’s idea has received lukewarm response from banks. Some bankers contacted by DNA Money pleaded ignorance about the RBI move. Bankers admit that increasing financial literacy is essential but they are not too keen to take the lead from the central bank as of now.

But the idea has got backing from some quarters. Andhra Pradesh has offered to bear the production costs of the books to be distributed in the state. The central bank will itself aim to achieve 100% financial inclusion in smaller states like Himachal Pradesh, Goa, Uttarakhand, while in larger states, it would give the responsibility to lead banks in each district.

However, officials of public sector banks DNA Money spoke to didn’t appear too keen on the idea. “Lead banks must take initiative and work with National Bank of Agriculture and Rural Development (Nabard) and make use of television and All India Radio to create awareness. The main aim should be to reach out in the most cost effective way,” said M Balachandran, chairman and managing director, Bank of India.

Bank of India has set up a Credit Counseling Services for both urban and rural areas, which advise people on how to manage their finances.

Reluctance of the banks may also be due to the fact that this is only a suggestion by the RBI and hence not mandatory.

Some banks that have a credit counseling centre may not want to start a new initiative for the same purpose.

K C Chakrabarthy, chairman and managing director, Indian Bank, confirmed that he got a letter from the RBI.

“I have marked the letter to the concerned department, if someone is competent enough and has the expertise then he may come up with a book,” Chakrabarthy said. IDBI deputy managing director OV Bundellu and a senior UTI Bank official said they were unaware of the development.

Through measures like these, the RBI wants to bring in some correction in major areas of concern like the ratio of deposit accounts to adult population, which, at 59%, is significantly lower than developed countries.

Since figures like these vary considerably across regions, priority is given to open up branches in under-banked or un-banked regions.