1611- PERSONAL FINANCE LITERACY

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Nearly 85% of students of arts and engineering colleges in Chennai could not do basic interest calculations on a small saving of Rs1,000 for two years at 10% interest compounded annually,

while 38% of the students did not know what PAN (permanent account number) stood for.

The findings also reveal that seven out of 10 students found basic inflation calculations difficult,

while 36% of them could not differentiate between income and expense.

More than half the number of students could not identify an asset in the multiple choice format. The choices included housing loan, personal car, insurance and income tax.

Moreover, 29% of students thought that bank fixed deposits were a risky option.

In an era when banks are going the whole hog to target young customers with anytime, anywhere and mobile banking, this finding has revealed that knowledge on personal finance is pretty low amongst youth in Chennai city.

The test was administered across seven colleges with 654 final year students participating in it. "Many of the students are from some of the well known engineering colleges in the city. Nearly 58% of the students did not know the highest income tax slab. And many of them are slated to get their first pay cheque within the next few months," the study said.

The low financial score is also despite launch of financial literacy material by the Reserve Bank of India last year. The central bank had issued revised guidelines on financial literacy centres (FLC) and also advised that all the rural branches of scheduled commercial banks scale up financial literacy efforts through outdoor camps at least once a month.
(TOI)
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