1. What is Financial Literacy Obligation?

It has two limbs:

A. Ex-ante obligation - To Educate: Duty of financial institutions and regulators to ensure that a customer gives informed consent and understands product, risk, cost, and suitability. The RBI vision statement says: Each low-income household has a legally protected right to be offered only suitable financial services.

B. Ex-post obligation - To Protect: Duty to have grievance redressal, disclosure, and not to mis-sell. India currently has 6 primary regulators - RBI, SEBI, IRDA, PFRDA, EPFO, FMC — all have embedded customer protection responsibilities.

Current regulatory approach is based on mandated information disclosure + financial literacy, predicated on caveat emptor, supplemented by grievance redressal.

2. Regulatory Framework in India

A. Reserve Bank of India - The Largest Obligation Holder

Financial Literacy Centres (FLCs): Under Circular RPCD.FLC.No.12452/12.01.018/2011-12 dated June 6, 2012 and RPCD.FLC.No.7641/12.01.018/2012-13 dated Jan 31, 2013, RBI made it mandatory that FLCs and all rural branches of Scheduled Commercial Banks must conduct outdoor Financial Literacy Camps at least once a month to facilitate financial inclusion.

Financial Literacy Centres (FLCs): Under Circular RPCD.FLC.No.12452/12.01.018/2011-12 dated June 6, 2012 and RPCD.FLC.No.7641/12.01.018/2012-13 dated Jan 31, 2013, RBI made it mandatory that FLCs and all rural branches of Scheduled Commercial Banks must conduct outdoor Financial Literacy Camps at least once a month to facilitate financial inclusion.

Centre for Financial Literacy (CFL) Project: Launched in 2017, community-led participatory model. As of March 31, 2025, 2,421 CFLs are operational, each covering three blocks on average.

RBI has noted that financial literacy will no longer be a mere moral obligation for banks after survey found centres were working as product-pushers of sponsor banks.

National Strategy for Financial Education (NSFE) 2020-2025 - Issued by National Centre for Financial Education (NCFE) under guidance of Financial Stability and Development Council. 5 Cs: Content, Capacity, Community, Communication, Collaboration.

B. SEBI - Investor Education

1. SEBI Act, 1992 - Section 11(2)(f) mandates SEBI to promote investors' education and training of intermediaries.
2. SEBI Investor Protection and Education Fund (IPEF) Regulations 2009 and Investor Education and Protection Fund (IEPF) under Companies Act, 2013 Section 125.
3. SEBI conducts financial literacy through Resource Person (RP) model and campaigns like "Samajh Se Investing Simple" and Project Jagrook.
4. SEBI Circular Jan 29, 2025: Definition of "person engaged solely in education". A genuine educator:

• Shall not be engaged in advisory/recommendation
• Shall not use market price data of preceding 3 months to display name/code of any security indicating