The Reserve Bank of India (RBI) has announced the formation of a composite Financial Inclusion Index (FI-Index) to capture the extent of financial inclusion across the country.

Financial Inclusion Index

• The FI-Index will be published in July every year.
• The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.
• It has been conceptualized as a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with the government and respective sectoral regulators.
• It has been constructed without any ‘base year’ and as such it reflects cumulative efforts of all stakeholders over the years towards financial inclusion.

Parameters of the index

• The FI-Index comprises three broad parameters viz.,

1. Access (35%),
2. Usage (45%), and
3. Quality (20%)

• These parameters are the identification of the customer, reaching the last mile, and providing relevant, affordable and safe products.
• The index is responsive to ease of access, availability and usage of services, and quality of services for all 97 indicators.

This year’s highlight

• The annual FI-Index for the period ended March 2021 stood at 53.9 compared with 43.4 for the period ended March 2017.

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