A study of the mechanisms through which people make financial choices proves to be a crucial area of concern in the field of behavioural finance. Although financial literacy is generally assumed to boost economic behaviour, an increasing amount of empirical evidence shows that literacy alone is not enough to kill the effects of behavioural biases. The current study aims to find out the existence of financial attitudes as a mediator psychological construct between financial literacy and the continuum of biases, such as overconfidence, herding, loss aversion, anchoring, mental accounting, and deficits of self-control. The study obtained moderate scores of financial literacy, widespread behavioural biases, and statistically significant interrelations between literacy, attitudes, and biases using a mixed-methods approach based on 752 respondents. The regression and correlation analyses show a negative relationship between financial literacy and the behavioural biases (r = -0.482) and a positive relationship between financial literacy and rational financial behaviour (r = 0.617). The principal component analysis also suggests that overconfidence, anchoring and herding explain 36.12% of variance in behavioural distortions. Based on the theoretical framework of Kahneman (2011), Lusardi and Mitchell (2014), and Thaler (2016), the study empirically proves that financial attitudes are a key mediator of the impact of literacy on behavioural biases. The paper is concluded by supporting the view that the financial education programmes should be designed to contain behavioural as well as attitudinal aspects to be effective in reducing the bias-related financial mistakes..