Financial education refers to the capacity to learn and efficiently use diverse financial skills such as individual financial management, investing and budgeting. It is the basis of the relationship with money of an individual. Generally, it is said that the earlier you start, the better you will be because knowledge is the root of success when it comes to money. Recently, we have seen an exponential increase in financial frauds in India and financial education can help individuals to protect themself from becoming victims of financial fraud. Also, the COVID-19 pandemic has made people move online in large numbers increasing the rise in financial frauds.

Financial Education is an important element in the Reserve Bank of India's developmental role. As part of its policy, The Reserve Bank of India has released the National Strategy for Financial Education (NSFE): 2020-2025 report. It is a multi-stakeholder driven program aimed at building a financially informed and empowered India. NSFE 2020-25 is the second NSFE, the first one was published in 2013. The new NSFE include the development of suitable content for school going children and adults, community participation and collaboration among various stakeholders.

The key points and highlights of the policy are discussed below:

The authorities involved:

The National Strategy for Financial Education is prepared by the National Centre for Financial Education (NCFE) in discussion with the Financial Sector Regulators such as the Reserve Bank of India, Securities and Exchange Board of India, Pension Fund Regulatory and Development Authority and Insurance Regulatory and Development Authority of India. NCFE is a Not for Profit Company under the Companies Act, 2013.

Multi stakeholder-led strategy:

It stresses a multi stakeholder-led strategy for allowing various sections of the society to develop adequate knowledge, skills, attitudes and behaviour needed to handle their money better and to plan for the future i.e. ensuring their financial well-being.

5C approach:

The authorities have recommended a 5C approach for the propagation of financial education in India:

• Content: Financial Education content for various sections of the society.
• Capacity: Strengthen the aptitude and ‘Code of Conduct for financial education providers.
• Community: Develop community-led approaches for sustainably disseminating financial literacy.
• Communication: Technology, media and other innovative ways can be used for communication.
• Collaboration: Collective efforts of stakeholders for financial literacy.

Objectives:

The key objective of NSFE are discussed below

• The policy aims to build a financially knowledgeable and empowered India. This involves financial education for all Indians, enabling them to understand the role of money in their life. 
• To lead financial education campaigns across India to assist people in managing their money more effectively. 
• To enhance the research and evaluation techniques to assess progress in financial education. 
• To improve digital financial services safely and securely. 
• To cover suitable pension plans for retirement. 

The National Strategy for Financial Education enthusiastic policy intends to strengthen the ecosystem for various prospects of digital financial assistance across India to design the essential foundation for financially empowered India. The policy attempts to develop credit control and wants to improve the usage of digital financial services safely and securely.