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1. NSBL
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(FINANCIAL LITERACY
PROGRAM)

2. NSBL 2
PLAN YOUR MONEY, PLANT YOUR FUTURE
Financial literacy refers to “Knowledge and understanding of financial
concepts and risks, and the skills as well as motivation and
confidence to apply such knowledge and understanding in order to
make effective decisions across a range of financial contexts, to
improve the financial well-being of individuals and society, and to
enable participation in economic life” (OECD, 2015, p. 9). It is a
combination of awareness, knowledge, skill, attitude and behavior
necessary to make sound financial decisions and ultimately achieve
individual financial wellbeing.
In consonance with GoN’s declaration for an inclusive financial system,
Nepal Rastra Bank (NRB), the central bank of Nepal, has the objective in
NRB Act, 2002 Section 4 (b) ”To increase the access of the financial
service and increase the public confidence towards the banking and
financial system”
Financial Literacy

3. NSBL
Elements of FL
Elements of FL
Elements Basic Level
The minimum degree of literacy required for all
individuals from any type of background to
navigate daily life
Advanced Level
The knowledge beyond the basic and
fundamental financial concepts
Core Competencies Financial Concept
 Needs and wants
 Financial goals
 Grievance handling
 Financial Discipline
 Digital Financial Services
 Capital Market
Planning and Managing
 Household Budget
 Savings
 Loans
 Financial Service Providers
 Remittance
 Microenterprises and Business Plan
 Risk Management
 Diversified Savings and Loans
 Rational Financial Decisions (Long
and Short Term)
 Variants of Digital Financial
Services
 Taxation
 Personal Finance

4. NSBL 4
Rules in Financial Literacy:
Rule1: Define your financial target for each phase of life.
Rule 2: Choose the most trusted financial intermediaries.
Rule3: Make a smart saving and diversified investment.
Rule 4: Take affordable credit
Rule 5: Stop spending in things that diminish in value.
Rule 6: Trust the power of time & compounding
Rule 7: Access risk and Options
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5. NSBL
• Helps to understand the value of money so we can handle
our finances better.
• It saves people from acquiring too much debt
• Financial Literacy helps prepare better expenditure plan
during times of emergency
• Enlightens us to invest and create income streams.
• Gives us the opportunity to help boost our country’s
economy.
• To pull unbanked people to banking channel
Benefits of Financial Literacy

6. NSBL
Amount in NPR Crore
6
Financial Inclusion refers to providing financial services(saving,
payments, credit, Insurance, access to capital market etc) to large
strata of population with easy access and at affordable cost. Financial
Inclusion foster social inclusion.
Main barrier of Financial Inclusion:
• Lack of trust in the financial system. It may be due to lack of
financial literacy.
• High Cost. May be price reasonable but user is poor to pay it. Or
price is really too high as service provider feels it is unprofitable.
• Lack of documentation.
• There is significant positive relationship between financial
inclusion and financial literacy.
Financial Inclusion

7. NSBL
Digital Literacy
Digital Literacy: It refers to understand what to share and what
not to share.
i.e. Dos and Do Nots.
Digitalization Vs Digitization.
Digitalization : The use of digital technologies to change a
business model and provide new revenue and value producing
opportunities. It is a deeper concept and process than
digitization.
Digitization: It refers to the internal optimization of process e.g.
work automation, minimization of paper works for cost
reduction.

8. NSBL
Digital Leader
Digital Leader: Who understand how to use digital technology for business
purpose and understand advantages and disadvantages of it.
Vision of 2025 of the RBI: E-payment, for Everyone, Everywhere and Every
time.
Theme of Nirbhik Naari (KMG): k|ljlwdf cJjn, hLjgdf ;kmn
FinTech: The interlinkage of Finance and Information Technology is known as
FinTech. It has played significant role in the evolution of finance. Large tech
companies or big techs like Google, Alphabet, Meta, Amazon etc already entered
in financial services. AIs (artificial intelligence), Robots are widely using in
banking services.
Banking is necessary, but banks are not- Bill Gates in 1994.
• M-Paisa Kenya
• Alipay China
• PayTM India
• E-Sewa Nepal

9. NSBL
Digital Literacy
Success of Fintech:
• Design robust customer centric products. Free from cybersecurity breaches, technical
glitches, frauds etc.
• Ensure customer suitability and appropriateness. Refraining from mis-selling or imprudent
lending
• Ensure that any inherent biases in models are addressed in a fair manner.
Central Bank Digital Currency (CBDC):
A CBDC is the legal tender issued by a central bank in a digital form. It is the same as a fiat
currency and is Exchangeable one-to-one with the fiat currency. Only form is different. CBDC is
a liability of the issuing central bank (and sovereign) and an asset of the holding public. CBDC is
a digital or virtual currency but it is not comparable to the private virtual currencies.
Cryptocurrencies:
A cryptocurrency is designed to be a currency but it is not a currency due to lack of
1) issuer, generally central bank or sovereign
2) it has not either commodity like intrinsic value or a debt instrument
3) it can not be treated as a financial asset due to absence of underlying cash flows and some
person’s liability

10. NSBL
Cryptocurrency
Satoshi Nakamoto, a fictional person or persons or corporate or
any other entity, no one knows yet, first design cryptocurrency
based on blockchain. On a blockchain, when a transaction occurs, it
is broadcast to all computers on the network. A set of new
transactions, called a block, are authenticated by an agreed
consensus mechanism and then the validated transaction block is
added to the previous blocks. Every block is linked to the previous
block, making double spending difficult because it would involve
changing every subsequent block. Bitcoin, Ether, Cardano, Dogecoin,
Tether, Stellar etc are collectively called cryptocurrencies. The prefix
‘Crypto-‘ refers to the fact that cryptography is used to generate or
authenticate transactions

11. NSBL
Cryptocurrency
Characteristics of cryptocurrencies:
• Cryptocurrencies are decentralized systems where transactions are
authenticated by participants themselves by consensus. They are
designed to bypass the financial system and all its controls. They cannot
be traced or confiscated or frozen by Governments.
• They are anonymous-transactions are verified, but not the purposes or
counterparties of transactions.
• They are borderless- that is, they work over the internet without any
physical existence.
The fundamental risks of cryptocurrencies are two- they are intended to
be private currencies and they are structured to evade Government
control with respect to financial integrity such as KYC, AML/CFT etc.
Some refer them as ‘freedom’ of money and digital assets.

12. NSBL
• KYC- Know Your Customer
• AML- Anti-Money Laundering
• CFT- Combating the Financing Terrorism
Few Terms

13. NSBL