Financial Literacy And - Icmai.in

CAT e-Bulletin - Vol. 2 - No. 2 - April - June 2020MESSAGECMA Amit Anand ApteImmediate Former President (2018-19) andFormer Chairman - CAT (2011-2014)The Institute of Cost Accountants of IndiaGreetings !!!The whole world is going throughunprecedented and challenging times due tooutbreak of COVID-19 pandemic. OurCountry is also facing its magnitude, posing seriousthreat to the health, life and economy. Thecoronavirus pandemic has disrupted normalcy inevery sphere of our life. All levels of the educationsystem is disrupted worldwide, leading to the neartotal closures of schools, universities and colleges.The pandemic is impacting business, global supplychains and international trade.productivity, and well-being in the decades tocome, and ensure the overall progress of thecountry.Students now have to be more responsive andproactive within the limited available resources andshould start adapting the new mode of remoteeducation system.Students please take care of your health, education,career and future growth. I am confident that wewillwinthe battleagainst thecoronavirus pandemic together.COVID-19 has pushed organisations to rapidlyoperate in new ways. Business are rapidly adaptingnew technologies and strategies to evolve withrapidly changing consumer behaviour, focusingmore on digital roadmaps.I am happy to see that our Institute has also startedonline teaching on a continuous basis throughWebinars, Online Interactive Sessions in the nameof WEBINT for the benefit of the students andmembers.Now educational institutions are also adoptingonline teaching methods to overcome the disasterand to ensure continuity of learning in thislockdown era. The lockdown presents educationalinstitutions an opportunity to adopt an alternativepedagogy that uses technological tools to facilitateacademic activities in the virtual world.My Best wishes to the Students and I wish the CATCommittee grand success in all its initiatives.In this time of crisis, a well-thought of andeffective educational practice is needed for thecapacity-building of young minds. It will developskills that will drive their employability,The Institute of Cost Accountants of IndiaWarm RegardsCMA Amit Anand Apte7

CAT e-Bulletin - Vol. 2 - No. 2 - April - June 2020MESSAGECMA Manas Kumar ThakurFormer President (2016-17) andFormer Chairman - CAT (2018-19)The Institute of Cost Accountants of IndiaGreetings !!!Iam really honoured and privileged as I am sharing myfeelings with one of the brightest section of the studentcommunities in our country, who are the "future of India" aswell as the "soldier of the society" through which we will live inperpetuity even after our demise.I am very thankful to my friend CMA H Padmanabhan ji,Chairman CAT of the Institute for giving me opportunity toshare my feelings and suggestions for the students.The outbreak of COVID-19 has created an unprecedentedsituation around the world. First of all I start by saying that wewill definitely win our battle against “Novel Corona Virus 2019“since we are working as a team. Our Heartiest Salute andPranam to the brave hearts like Doctors, Nurses, HealthProfessionals, Police and others who are working relentlessly tomake our life easier in this life threatening environment.Dear friends , there is no doubt that this is a disaster ofunimaginable proportion. We should be calm and sensible in thisturbulent period. Remember one thing that any sort ofdisaster will provide you new paths or opportunities. But weshould know how to handle the situation and way to tap theopportunities. If you carefully analyse you may find that COVID19 and lockdown has already become a great teacher in manysphere of our life like digitization, our future work pattern,education, social networking, food habits, concern for theenvironment etc. We have to adapt with this situation and I haveno doubt that it will create many opportunities for the World andwe will come out even stronger from this situation.Students, to reach your target or to become successful in lifethree D's are very vital, “Desire, Dedication and Discipline”.Success is the main moto in life but you should be ready toaccept the failure also. There is no room for frustration. Bepositive and motivated. Friends when you play a football matchand you find that your opponent team is taking lead then whatyou will do? Surrender or Recharge yourself ? If that time if youmotivate yourself and your team mates that “we will win". Thenonly the result will be in your favour. You have the capacity,prove yourself. Please keep in mind that Time is the main rulerin life. Use it judiciously. Once lost, it never comes back.Students, Self-analysis is very vital. Find your strengths, knowyour weaknesses. Nurture your strength effectively but becautious and remember your weaknesses. I believe you all havethe leadership quality. Follow the style, don’t copy anyone. YouThe Institute of Cost Accountants of Indiashould have your own identity. So try to prove your existence.God has given all of us “an Unique Strength”. Please deep diveinto your mind and identify your uniqueness. Your success willdefinitely be assured.You are born in this country. India is your motherland. Youhave immense responsibilities towards your family, your societyand your Nation. You should always feel proud aboutyour Society and the Nation. Modern India depends on youngpeople like you.Don't allow your mind to follow a selfish path. We all areindebted to our Society since it has shaped us to what we aretoday as human beings. So we should try to give back as muchas possible without any hesitation. This is like what we do forour parents. In this COVID 19 pandemic and lockdown situationplease be safe, take care of your family and also try to extendhelp to the society. Your Success will count, if you are able todo something for your Society.In conclusion, I remember our great Swami Vivekananda’smessage in a lecture delivered on 12th November 1896 at Lahorewhere he said “Arise, awake and stop not till the goal isreached.” I feel this should be our anthem for the time being andin near future.I am happy to see that in this lockdown period our Institute hasstarted Webinars, Online Interactive Sessions “WEBINT” onvarious topics under the able leadership of the CMA H.Padmanabhan ji, Chairman – CAT for the benefit of the studentsand members of the Institute.My best wishes to the officials of CAT Directorate for sincerelyworking from home in this lockdown period for the benefit ofthe students of the Institute.Stay safe and healthy!!!Warm RegardsCMA Manas Kumar Thakur8

CAT e-Bulletin - Vol. 2 - No. 2 - April - June 2020MESSAGECMA Avijit GoswamiFormer Chairman - CAT (2017 -18)The Institute of Cost Accountants of IndiaGreetings !!!Iam very happy to note that the Certificate inAccounting Technician (CAT) Committee isbringing out the quarterly issue of this EBulletin for the 2-nd quarter of 2020. In spite of thefact that when the whole world is passing through achallenging times due to the COVID 19 situation,the members and the officials of the CATCommittee are working relentlessly and silentlyunder the able leadership and guidance of theChairman CMA H. Padmanabhan for continuousimprovement of this special course of the Institute.In the Post COVID 19 situation, India is expectedto be less dependent on China for its manymanufactured products and as a result, there wouldbe a huge requirement of skilled manpower in alltypes of functions of the businesses, and speciallywith a potential of enormous growth in SME andMSME sectors, there would definitely be a lot ofemployment opportunities for our CAT Coursepassed students as well.I would like to take this opportunity to congratulateCMA H. Padmanabhan, Chairman - CATCommittee for bringing out this “E-Bulletin”. I alsocongratulate the other members of the CATCommittee and the officials of the CATDepartment for their efforts to publish this EBulletin in the present form.Best Regards,CMA Avijit GoswamiThrough this medium of E-Bulletin, I would like toconvey my best wishes to all the students of theCAT Course for their successful and bright futurecareer , and I am also confident that with their skilland performance , all the CAT qualified studentswould take the active part in the nation buildingprocess.The Institute of Cost Accountants of India9

CAT e-Bulletin - Vol. 2 - No. 2 - April - June 2020MESSAGECMA Dr Iyyanadar AshokFormer Chairman - CAT (2015 -17)The Institute of Cost Accountants of IndiaGreetings !!!The outbreak of pandemic COVID-19 iscausing terrible human suffering across theworld. This global health has created aunique challenge that has impacted all of us. Theeconomic impacts of the coronavirus pandemic arepalpable for all of us. It has paralysed all levels ofeducation and training provision. The COVID-19pandemic is challenging education and businessesto think in unique and different ways. Thedisruptions caused by the virus outbreak have leftdeep impacts on consumer behaviour andpreferences.But this crisis has created opportunities for thedevelopment of more flexible learning solutionsthat make better use of distance learning and digitaltools by shifting from classroom learning to onlineor distance learning. Digital transformation isdriving positive outcomes in this COVID 19pandemic and lockdown era: whether it isimparting education to students, streamliningprocesses, harnessing data or shaping entirely newways of doing business, uniting every part of theenterprise or uniting the whole world for a commonpurpose. Students now will be able to grab theexpert lectures of the faculties from any part of theworld, thus enhancing quality education. This crisiswill also enhance new areas of business andemployability by followings the footsteps ofdigitization and new technologies.The Institute of Cost Accountants of IndiaI am happy to learn that the Institute is alsoadapting new technologies and is conducting onlineeducation and training programmes through variouswebinars for the students and members of theInstitute. I have also seen that the Institute is alsotrying to enhance the scope in which every studentcan have the access to professional education andin developing a pool of market-ready talent throughthe CAT (Certificate in Accounting Technicians)Course. The CAT Directorate is establishing newRegional Oral Coaching Centres to increase itspresence all over India and to benefit the aspirantsof CAT course by providing industry orientededucation and training and hence making theaspirants of CAT Course “Industry Ready” or “JobReady”.I am thankful to CMA H Padmanabhan, Chairman- CAT for giving me an opportunity to pen downmy feelings in the CAT e Bulletin.My best wishes to the students.Stay Safe and healthy!Warm RegardsCMA Dr Iyyanadar Ashok10

CAT e-Bulletin - Vol. 2 - No. 2 - April - June 2020FINANCIAL INCLUSION THE NEED OFTHE HOURShri K. N. BalakumaranMSc (Ag), CAIIB, PGDHRMRetired as Lead District Manager (LDM) for Trivandrum district (Lead bank IOB)Of late, Financial Inclusion has gainedmuch prominence, attention andactivities in our country. The closerelationship between ‘inclusive growth’ of allsegments of population in a country & financialinclusion has been well established. UnitedNations has approved “Financial Inclusion” asone of the seventeen “Sustained DevelopmentGoals (SDGs)” for achieving a sustainableDevelopment, worldwide.While World Bank aims to achieve UniversalFinancial Access by 2020 meaning all adults, theworld over to have at least one Bank account, inIndia, too many households lack bank accounts,too many small business units have no recourseto formal credit and the developmental race isweighted down by exclusion.Access tofinancial services opens door for families ofexcluded segments for betterment of theirconsumption leading to better life standards &also for investment for future through health,education, access to credit, livelihoodopportunities, reduction of inequality & old agefinancial protection.yearPopulationestimate2019138 Cr18-70 Yrsegment(approx)77 CrNo ofPMJDYaccounts36.1 CrFinancial Inclusion is in effect bringing familiesof excluded segments into access to formalfinancial institution, more specifically as accessto banking. This will entail them to savings,payment processing, micro finance, insurancecoverage, mortgage & even old age financialprotection like pension. These in effect createinvestments, Jobs & stimulate growth in specificareas. The talk of deepening financial inclusionis often accompanied by expressions of concernabout the implications for systemic stability ofagencies involved. IMF analysis has shown thatmore inclusion boosts growth, so it is possible tohave both higher growth as well as moreinclusion.The Institute of Cost Accountants of IndiaTo deepen Financial Inclusion, many agencieshave to play their role. At the outset, BankingServices need to be close to where people are.Inclusion does not mean lending to everyone atany cost as extension of credit to unproductiveprojects, ill-informed persons & unfit clients willexpose lenders to higher risks as well as drive theclients deeper into debt. Banks, Paymentnetworks, Microfinance institutions, NGOs,Telecommunication Companies, Technologycompanies, Central Bank viz., RBI & above allthe Government have to play their roleseffectively.While India is the fifth largest economy bynominal GDP and the third largest economy byPurchasing Power Parity (PPP) method, the percapita income stands at 139th rank (GDP) and118th rank (PPP) among 195 countries in theworld. As per 2011 census nearly 22% of thepopulation was poor. The estimate for 2019 is17% with the next census due next year. WorldPoverty Clock estimates extreme poverty inIndia at 5.3% of population (with income lessthan 1.9 /day). All this point out to dire need togo ahead with inclusive growth in turn withrenewed focus on financial inclusion in ourcountry.Indian Scenario: - The term “FinancialInclusion” was used by RBI for the first time inits Annual financial Statement for 2005-06expressing concern at the exclusion of vastsection of our population from formal financialsystem. This was followed by introduction of abasic “No Frills” bank account for those with anannual deposit not exceeding Rs 50,000/- basedon RBI’s Khan Committee recommendation(2005). Norms for opening accounts wereliberalized. In the following year RBI gavepermission to engage NGOs, SHGs, MFIs, otherCivil society Organisations as intermediaries forexpanding banking services reach, working as“Business Correspondents (BC)/ BusinessFacilitators (BF)”.11

CAT e-Bulletin - Vol. 2 - No. 2 - April - June 2020However, lack of adequate bank branches inrural areas, illiteracy more so lack of financialliteracy, Low income & savings & inadequatelegal & consumer protection frameworksimposed roadblocks in last mile connectivity &in achieving the goals.By 2011 only 59% of households had access tobanking services. Of this, urban households hada slight edge at 68% while that for ruralhouseholds was 54%. Only 38% of Bankbranches in the country worked in rural areas, inthe case of ATMs it was still less at 15%. Theinitiative for establishing BCs/BFs led toestablishment of 1.4 lakhs BCs, but the actualfield level experience indicated that many ofthem were not functional.PMJDY as a “Watershed” in Financialinclusion action plan: - The NationalCommission for Financial Inclusion launchingthe scheme named as “Prime Ministers Jan DhanYojna (PMJDY)” on 28th August, 2014 was awatershed in this area. The scheme aimed atproviding basic banking account to atleast 75Million (7.5 Cr) households which has savings,micro credit, micro life & non-life insurance,debit card facility, self-accumulated old agepension etc. all converged into a single window.The core theme was “Universal Access toBanking Facilities”. The Bank account underthis scheme provided a basic bank account forsavings & remittance with zero balance andminimal documentation, a RuPay debit card withfree accidental/ PTD insurance cover of Rs OneLakh, Over draft facility upto Rs 5,000/(subsequently raised to Rs 10,000) after 6months, Mobile banking facility for remittance,balance generation & mini statement generation,free Life Insurance cover of Rs 30,000/- (18-59yrs age) etc. The scheme also provided for Life& non-life insurance, old age pension, DirectBenefit Transfer (DBT) for social benefits etcto be attached to this account. Present status ofaccounts opened under this scheme indicates thataccounts opened under this programme are alsoturning the corner.Status of PMJDY accounts (As at 3-7-2019)PvtPSUItemssectorRRBsTotalbanksbanksNo. of28.636.11.3 Cr 6.2 CrAccounts CrCrBalance0.7940.0300.1811.005in A/ClakhLakhLakhLakh(Rs)CrCrCrCrThe Institute of Cost Accountants of IndiaIncreasing Reach of Bank outlets: - Varioussteps were initiated to ensure that at least OneBank outlet became available within a distanceof 5 KM from a village. Towards this endsurvey, location mapping etc were undertakenthrough Lead Bank/SLBC mechanisms. It wasalso stipulated that in the opening of Brick &Mortar branches, at least 25% of the totalnumber of branches opened by a bank in an yearshould be in ‘Unbanked Centres’. GeneralPermission was given by RBI to Commercialbanks to open branches in Tier III & IV centreswith population upto 50,000. Banks have ageneral depressed apetite for opening Ruralbranches due to low business volumes, hightransaction costs & infrastructural roadblocks ondigitalisation. Inspite of these, the growth in thenumber of Rural branches keeping pace or evenmarginally exceeding the pace of growth ofoverall number of branches is a positivedevelopment from the point of deepeningfinancial inclusion.2019%ageincrease52,18166%1,55,18364%Year - 2011Rural branches(No)Total no. ofbranches (No)%age of Ruralbranches31,39194,85733%34%Govt backedSchemes:-SocialSecurityInsuranceLaunching of three Social Security Schemeswhich had almost no stringent conditionalitiesexcept age restrictions proved to be anotherimportant milestone in deepening financialinclusion of excluded segments.The first product viz., “Pradhan ManthriSuraksha Bima Yojana (PMSBY)” which isalmost a universal accidental insurance policycovering people upto 70 years (from 18 yrs) withrockbottom premium of Rs 12/- per year with aRisk cover of Rs 2 Lakh for accidental death &PTD and Rs 1 Lakh cover for partial disabilityprovided a cheap & flexible accident insurancecoverage. All commercial banks act as collectionagents with auto debit features. Claimsettlements are fast and reliable. LDMs in everydistrict review claim settlements on quarterlybasis. Data shows that 17.03 crore people gotinsured under this scheme as at November, 2019.On a population of 138 crores, the segment of12

CAT e-Bulletin - Vol. 2 - No. 2 - April - June 202018-70 yrs constitute about 56%, working out toroughly 77 Crores. Hence enrollment by eligiblegroup stands at 22% only. There is need todeepen enrollments by rural households.Commercial Banks & Insurance Firms arehandicapped due to their sparse location, meagerstaffing & pleothora of activities. The lack ofawareness, distance

CMA H. Padmanabhan Members CMA Rakesh Bhalla CMA Ashwinkumar G. Dalwadi CMA Niranjan Mishra CMA V. Murali CMA Paparao Sunkara CMA Rakesh Singh (Co-opted) CMA P V Bhattad (Co-opted) Secretary CMA Rajesh Jain, Deputy Director DIRECTORATE OF CAT - OFFICIALS CMA Rajesh Jain HOD - CAT & Deputy Director Mr. Niraj Garg Deputy Director