Meet the Expert. Honey, how well do you understand money?

In the wake of the global financial crisis, most countries felt the gap between regular and financial literacy because people were sold financial products but had no idea what they were all about. That’s how financial education came into focus. We launched a national strategy for financial education in 2013.

In 2013-14, we surveyed 75,000 people in different socio-geographical groups across the country. We basically looked at knowledge, attitude and behaviour of participants towards financial products and financial institutions. Wefound that the mean financial literacy was 20 per cent; nearly 50 per cent of the States were below national average. Tamil Nadu, Andhra Pradesh and Kerala, which were otherwise highly literate States, were all very close to the national average.

Hence, we launched programs such as FAME (Financial Awareness Messages) and FACT (Financial Awareness Consumer Training). Since social security is low in India and people usually don’t have a proper pension plan, financial education is an absolute necessity.

NISM has six schools of excellence. It offers part-time and full-time courses and all of them are post-graduate and certification programs. Our flagship course is the post-graduate program in securities markets, a one-year, full-time program. ICICI Bank also subscribes to this program in order to enable its staff to move up from junior to middle management level. So every program has 25 working professionals from ICICI Bank along with 125 other students.

Then we have a two-year, post-graduate diploma or MBA program in capital markets, which is a regular AICTE-recognised program.

We run three programs with Mumbai University – PG diplomas in financial engineering and risk management, in data science, and in quantitative analysis.

Our six schools are School for Certification of Intermediaries (SCI), School for Corporate Governance (SCG), School for Investor Education and Financial Literacy (SIEFL), School for Regulatory Studies and Supervision (SRSS), School for Securities Education (SSE) and School for Securities Information and Research (SSIR).

Besides these, we have a school for certification offering 22 certificates of which 15 are mandated, either by the capital markets regulator, the bankruptcy board or by the PFRDA. Without certain certification, people cannot operate in the markets. Also, it adds to their fundamental understanding of markets and enriches their profile.

The certificates offered by exchanges are aspirational. What we provide is the certification mandated by the market regulators. Other courses may enhance your resume but your employer will prefer NISM certification.

We enter into a lot of MoUs (memorandum of understanding) with many colleges and universities and the general desire in going in for these arrangements is to bring additional weight to an MBA finance program. I feel the general MBA program does not sufficiently cover all aspects of finance. The MoUs, such as the one with LIBA, facilitate working with these institutions and trying to spread knowledge of financial markets among the students.

In the Indian context, generally one-year masters programs are not recognised for further education. Job-wise no problem but if you want to study further, you have to do a two-year masters program. Many of our students, who had joined the markets, wanted to pursue research but couldn’t. This is one of the reasons why we introduced a two-year program.

Certificate programs were offered in three languages originally. One was Gujarati, because it was felt that the Gujarati community is more active in the capital markets. Many certificates were offered in Hindi but our experience over the last 10 years has been that not even 1 per cent of students have opted to take the test in Hindi or Gujarati.

Somehow, the market language remains English for certificate and regular courses. For PG programs, it is, by and large, English only because there is no reading material available in regional languages. But when it comes to basic financial education, we provide material in 10 languages and looking to add Odia, Malayalam and Assamese.

In the last 10 years, it has been 100 per cent. I tell students just this: if you have come for learning, then you will have 100 per cent placement, but if you have come for placement, you may or not be placed. This period is also for job creators, not just job seekers. After all, there are distributors whose annual income is ₹100 crore. If everybody is looking to work in the organised sector, I think we are running into trouble in the future.

We require graduation pass, at least 50 per cent, and you should have taken one of the recognised entrance exams such as MAT, CAT and XAT. Then NISM would conduct the group discussion and interview. There was a time when we conducted our own entrance examinations, but we have dropped that.

This is to introduce basic financial awareness in the school curriculum. We learn about compound interest as part of arithmetic in the school but we understand the power of compounding only when we miss our EMI payment or our credit card bill payment.This is the negative side of it. On the positive side, some people would have invested ₹500 monthly in the early 90s, now they are all crorepatis.

In the Indian scenario, we have a sort of academic inflation where everybody wants certificates and qualifications. If you see a student profile, it is packed with qualification — without knowledge, I feel. We thought if we could launch a certificate signed by the director, NISM, and deputy governor, RBI, students will be enthused to take this course. Now we have 3-4 lakh students taking this test every year. This is a three-level test — for classes 6-8, 9-10 and 11-12, respectively.

This test is done across the country 24/7, students can register and take it from their computer lab. We also offer offline tests, for a fortnight, every year, in which schools can register. We provide the question papers and OMR sheets.

‘First pay check’ is a program we run for corporates which basically explains what to do with your first salary. We also train teachers, principals and directors of colleges/universities. We not only conduct the training ourselves but also do it through resource personnel programs. We also talk about retirement planning.

The last 5-6 years have been expansion time. Our approach was to expand first, then consolidate. Now we run seven programs (from one earlier), we used to certify 50,000 people, now it is 3 lakh. But small is beautiful, so my total staff is 75, distributed in the six schools and everyone puts in around 13-14 hours.

It is time to consolidate over the next two years and then become a university. Students from engineering background too wish to get such certification but they will have to start from scratch. The plan is to become a university where we can provide undergrad programs, especially in finance and banking. We are also operationally self-sufficient.

COMMENT NOW