2013 IFIE / IOSCO Global Investor Education Conference

June 20 - 21, 2013

Amarjeet Singh Chief General Manager

Securities and Exchange Board of India

Outline

Challenges

Changing demographic profile

Pension system – Low coverage

Financial Literacy Initiatives – SEBI

National Strategy for Financial Education

The Road Ahead

(Disclaimer: Contents are my personal views)

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India - Changing Demographic Profile

Population (Billions)- 1.2 (2012); 1.45 (2028); 1.66 (2050)

Age Distribution (approx.)

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29%

18%

40%

7% 6%

0-14 years 15-24 years 25-54 years 55-64 years 65 years and over

Life Expectancy - 67 years (2012); 76 years (2025)

Population Growth Rate - General: 1.76 %; Elderly: 3.8 %

Share of elderly in the population - 8.2 % (2008); 10.7 % (2021); 21 % (2050)

Literacy Rate - 61 % (2001); 74 % (2011)

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India - Changing Demographic Profile

Changing Demographics

5

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2012 2028 2050

1.2

1.45

1.66

Population (Billions)

0

5

10

15

20

25

2008 2021 2050

8.20

10.70

21.00

Proportion of Elderly (%)

Pension System in India - Few Pointers Low Coverage of workforce

Organized sector - 11 % Unorganized sector - Negligible

86% of the workforce in unorganized sector

National Pension System, 2003 Defined contribution based (no guaranteed returns) Low Cost model (Investment Management fee - 0.25% p.a.)

2004 - Mandatory for new recruits in Govt. of India

2009 - Extended to all citizens (voluntary)

2010 - Co-contributory scheme for unorganized sector

Other voluntary schemes – Govt./ Life Insurance Cos./ MFs.

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Financial Literacy Initiatives - SEBI

Nationwide campaign

Various target segments (including potential retirees)

Financial Education Booklets

Resource Persons

“Visit SEBI” Programme

Dedicated website (http://investor.sebi.gov.in/)

Dedicated investor helpline (Toll Free)

Media campaign

SCORES – Web-based, centralized grievance redressal system

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SEBI Approach - Target Groups

School Children (Pocket Money Program) Young Investors

Middle Income Group Home Makers Executives Retirement

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SEBI Initiative - Resource Persons (RPs)

Innovative outreach, developing since 2010

RPs - teachers, retired/existing employees of public sector /various regulators with minimum 3 years of working experience

Training to short listed RPs

Financial Incentive

9

10

176

3089

5935

0

1000

2000

3000

4000

5000

6000

7000

2010-11 2011-12 2012-13

Number of Programs

125

293

908

0

100

200

300

400

500

600

700

800

900

1000

Mar-11 Mar 2012 Mar-13

Number of RPs

SEBI Initiative - Resource Persons

11

Resource Persons - Outreach

7

6

13 18

36 32

100 42

51

20

9 43

8

48 81

7 55

75

48 93

68

1

32 2

4

3

4 5

SEBI Initiative - Focus on Retirement Planning Focused material – “Investment Planning for Retirement”.

Dedicated workshops on Retirement Planning.

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2011 – 12 2012 – 13 2013 – 14 (Apr – May)

24 86 32

SEBI Initiative - Focus on Retirement Planning • Loans vs. Investment

• Personal budget calculator

• Personal Net worth Calculator

• Retirement income

• Investment commandments

• Avoid alluring investment schemes • Real Estate planning

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National Strategy for Financial Education – Some Unique Features

Vision – ‘A financially aware and empowered India’

Proposed coverage - 500 Mn people in a five-year period

A broad overview -

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Key Component

Aimed At Content Objective

Financial Literacy

Excluded Basic Financial inclusion

Financial Education Included Sector / Product Focused

Enable informed choices

Consumer Protection All Consumer Rights Access to redressal mechanism

The Road Ahead….

Enhancing Coverage Expand NPS

Dealing with geography, diversity and changing demographics

Increase private sector participation with incentives and safeguards (room for MF based pension instruments)

Pension focused Financial literacy campaign

Streamlining regulatory purview

Development of Debt Market

Capacity Building

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NSFE – Unique Features

Key Stakeholders – Financial Consumers; Financial Market Players; Educational Institutions; NGOs; Financial Sector Regulators (like SEBI, RBI & IRDA); Central & State Governments; Multilateral Agencies (OECD, G-20, etc)

Broad Content - Impart responsible attitude, incorporate core financial competencies, building confidence towards risk assessment and awareness of available grievance redressal mechanism.

Delivery Channels -

School Curriculum Social media Channels Resource Persons Self-help Groups Dedicated Help lines

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Financial Literacy Initiatives - Other Regulators PFRDA

Focussed FAQs on pension related topics Association with various NGOs for taking pension services to the disadvantaged Pension awareness in vernacular languages through intermediaries Advertisements in print and electronic media

RBI “Project Financial Literacy” Town hall and outreach visits Visits of schools and college students to RBI Annual quiz programme for students

IRDA Public awareness messages through media channels Annual Seminar on policy holder protection and welfare Policyholder handbooks and comic book series on insurance Integrated grievance management system Dedicated policyholder education website

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