Post on 23-Aug-2020
2013 IFIE / IOSCO Global Investor Education Conference
June 20 - 21, 2013
Amarjeet Singh Chief General Manager
Securities and Exchange Board of India
Outline
Challenges
Changing demographic profile
Pension system – Low coverage
Financial Literacy Initiatives – SEBI
National Strategy for Financial Education
The Road Ahead
(Disclaimer: Contents are my personal views)
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India - Changing Demographic Profile
Population (Billions)- 1.2 (2012); 1.45 (2028); 1.66 (2050)
Age Distribution (approx.)
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29%
18%
40%
7% 6%
0-14 years 15-24 years 25-54 years 55-64 years 65 years and over
Life Expectancy - 67 years (2012); 76 years (2025)
Population Growth Rate - General: 1.76 %; Elderly: 3.8 %
Share of elderly in the population - 8.2 % (2008); 10.7 % (2021); 21 % (2050)
Literacy Rate - 61 % (2001); 74 % (2011)
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India - Changing Demographic Profile
Changing Demographics
5
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2012 2028 2050
1.2
1.45
1.66
Population (Billions)
0
5
10
15
20
25
2008 2021 2050
8.20
10.70
21.00
Proportion of Elderly (%)
Pension System in India - Few Pointers Low Coverage of workforce
Organized sector - 11 % Unorganized sector - Negligible
86% of the workforce in unorganized sector
National Pension System, 2003 Defined contribution based (no guaranteed returns) Low Cost model (Investment Management fee - 0.25% p.a.)
2004 - Mandatory for new recruits in Govt. of India
2009 - Extended to all citizens (voluntary)
2010 - Co-contributory scheme for unorganized sector
Other voluntary schemes – Govt./ Life Insurance Cos./ MFs.
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Financial Literacy Initiatives - SEBI
Nationwide campaign
Various target segments (including potential retirees)
Financial Education Booklets
Resource Persons
“Visit SEBI” Programme
Dedicated website (http://investor.sebi.gov.in/)
Dedicated investor helpline (Toll Free)
Media campaign
SCORES – Web-based, centralized grievance redressal system
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SEBI Approach - Target Groups
School Children (Pocket Money Program) Young Investors
Middle Income Group Home Makers Executives Retirement
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SEBI Initiative - Resource Persons (RPs)
Innovative outreach, developing since 2010
RPs - teachers, retired/existing employees of public sector /various regulators with minimum 3 years of working experience
Training to short listed RPs
Financial Incentive
9
10
176
3089
5935
0
1000
2000
3000
4000
5000
6000
7000
2010-11 2011-12 2012-13
Number of Programs
125
293
908
0
100
200
300
400
500
600
700
800
900
1000
Mar-11 Mar 2012 Mar-13
Number of RPs
SEBI Initiative - Resource Persons
11
Resource Persons - Outreach
7
6
13 18
36 32
100 42
51
20
9 43
8
48 81
7 55
75
48 93
68
1
32 2
4
3
4 5
SEBI Initiative - Focus on Retirement Planning Focused material – “Investment Planning for Retirement”.
Dedicated workshops on Retirement Planning.
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2011 – 12 2012 – 13 2013 – 14 (Apr – May)
24 86 32
SEBI Initiative - Focus on Retirement Planning • Loans vs. Investment
• Personal budget calculator
• Personal Net worth Calculator
• Retirement income
• Investment commandments
• Avoid alluring investment schemes • Real Estate planning
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National Strategy for Financial Education – Some Unique Features
Vision – ‘A financially aware and empowered India’
Proposed coverage - 500 Mn people in a five-year period
A broad overview -
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Key Component
Aimed At Content Objective
Financial Literacy
Excluded Basic Financial inclusion
Financial Education Included Sector / Product Focused
Enable informed choices
Consumer Protection All Consumer Rights Access to redressal mechanism
The Road Ahead….
Enhancing Coverage Expand NPS
Dealing with geography, diversity and changing demographics
Increase private sector participation with incentives and safeguards (room for MF based pension instruments)
Pension focused Financial literacy campaign
Streamlining regulatory purview
Development of Debt Market
Capacity Building
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NSFE – Unique Features
Key Stakeholders – Financial Consumers; Financial Market Players; Educational Institutions; NGOs; Financial Sector Regulators (like SEBI, RBI & IRDA); Central & State Governments; Multilateral Agencies (OECD, G-20, etc)
Broad Content - Impart responsible attitude, incorporate core financial competencies, building confidence towards risk assessment and awareness of available grievance redressal mechanism.
Delivery Channels -
School Curriculum Social media Channels Resource Persons Self-help Groups Dedicated Help lines
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Financial Literacy Initiatives - Other Regulators PFRDA
Focussed FAQs on pension related topics Association with various NGOs for taking pension services to the disadvantaged Pension awareness in vernacular languages through intermediaries Advertisements in print and electronic media
RBI “Project Financial Literacy” Town hall and outreach visits Visits of schools and college students to RBI Annual quiz programme for students
IRDA Public awareness messages through media channels Annual Seminar on policy holder protection and welfare Policyholder handbooks and comic book series on insurance Integrated grievance management system Dedicated policyholder education website
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