A STUDY ON THE EFFECTIVENESS OF FLCC PROGRAMME LAUNCHED BY FEDERAL BANK

The new economic reforms of government, advances in technology and great market orientation and financial innovation have reshaped the financial landscape. It means the people have so many investment opportunities. Poor people particularly in rural areas are often wary of banks and finds branches intimidating. A profound lack of financial literacy also reinforces the sense of alienation. The rural poor are also unaware about how to deal with credit, how to avoid incurring debts that cannot be repaid. In order to solve these problems RBI has decided to provide financial literacy along with credit counselling. As such RBI has come out with a model scheme on FLCC and advised banks to set up as many FLCC in order to achieve at least one FLCC per block. In consonance with RBI directives the Federal Bank, the first bank in the state which started FLCC, established a trust namely ‘Federal Ashwas Trust'. The main objective of this trust is the establishment and running of ‘Federal Aswas Financial Literacy Centers' (FAFLC) for providing financial education to the public. The objective of the scheme is to provide free financial literacy education and credit counselling to people in rural and urban area. Through this FLCC centers across the state, customers are educated on responsible borrowing, proactive and early savings and also offers debt counselling to individuals.