What changed
RBI replaced the earlier FLCC model with a new FLC scheme after a study found FLCCs were urban-only, had low awareness, and lacked independence from sponsor banks. The new scheme mandates setting up FLCs in all Lead District Manager offices (630+ centres) and requires all rural branches of scheduled commercial banks to conduct outdoor financial literacy camps at least once a month.
What it means for you
Banks must now establish FLCs in every district LDM office and ensure rural branches run monthly outdoor camps focused on financially excluded populations. This expands reach to rural areas and reduces misselling risks by focusing on simple literacy messages. Banks need to train staff in behaviour orientation and prepare vernacular literacy materials.
What you must do
- Set up Financial Literacy Centres in each Lead District Manager office in a time-bound manner.
- Ensure all rural branches conduct at least one outdoor financial literacy camp per month targeting financially excluded people.
- Identify a responsible officer in LDM offices and rural branches to prevent misselling of financial products.
- Train FLC officials in behaviour orientation and provide periodic knowledge updates on banking products.
- Prepare financial literacy material in vernacular languages using stories and pictures, covering savings, remittances, and credit products.
Who it affects
Scheduled Commercial Banks including RRBs, Lead District Manager offices, Rural bank branches, Financial Literacy Centre staff
What is the key difference between the old FLCC and new FLC scheme?
The old FLCC scheme had centres only in urban/semi-urban areas with limited outreach and dependence on sponsor banks. The new FLC scheme mandates centres in all district LDM offices and requires rural branches to hold monthly outdoor camps, aiming for wider rural coverage and independence.
What are the core messages FLCs must impart?
FLCs should deliver simple messages like why save, save early, save with banks, borrow from banks, borrow for income-generating activities, repay on time, insure yourself, and save for retirement.
How can banks prevent misselling in FLCs?
Banks must designate an officer in LDM offices and rural branches to ensure no misselling occurs. Since FLCs focus on simple literacy messages, the risk is low, but the officer is responsible for oversight.