FINANCIAL LITERACY

Abstract

Financial literacy as defined by OECD is “a combination of financial awareness, knowledge, skills, attitude and behaviors necessary to make sound financial decisions and ultimately achieve individual financial wellbeing.” Together with Financial Inclusion and Consumer Protection, Financial Literacy forms a triad, which is necessary for ensuring financial stability. Thus, financial literacy has significant relevance for financial inclusion and consumer protection. Without financial literacy, we cannot expect to make major headway in either financial inclusion or consumer protection. RBI the country’s financial headquarter has taken a number of initiatives to improve the level of financial literacy in India. The research aims at finding the financial literacy level of people pf Delhi and National capital region. The research assesses three important factors of financial literacy that is people financial knowledge, there financial behavior and ability to understand the concepts of risk, return and risk diversification. To measure the financial literacy level a questionnaire was designed and was distributed amongst the respondents. A total of 80 responses were received while only 64 were received complete. Further analysis is made to calculate the respondents’ average financial score, average financial behavior and average risk analyzing ability score. Respondent were also asked questions about their age, educational qualification, gender and salary range. Attempts were also made to draw relationship between respondents’ demographic factors and the responses that they have provided. In the end recommendation are made on what steps RBI should take to improve the financial literacy level of the people of India.