The Reserve Bank of India (RBI) has created a composite Financial Inclusion Index (FI-Index), which will gauge the reach of financial inclusion in the country, incorporating details of banking, investments, insurance, postal and the pension sector. Views of the government and the concerned regulators of these sectors have also been incorporated while preparing the index.
The central bank had announced the creation of the index in its "Statement on Developmental and Regulatory Policies in the First Bi-monthly Monetary Policy Statement for 2021-2022", which had come out on April 7, 2021.
The annual FI-Index for the period ending March 2021 is 53.9 as against 43.4 for the period ending March 2017. The FI-Index will be published annually in July every year.
Some of the key aspects of the FI-Index are as follows:
It has collated information on various aspects of financial inclusion in a single value ranging from 0 to 100. The digit 0 denotes total financial exclusion while the digit 100 suggests complete financial inclusion.
The index has three main parameters, namely access (with 35 per cent weightage), usage (45 per cent weightage) and quality (20 per cent weightage). All these have been computed on the basis of various indicators.
The unique feature of the index is the "quality" parameter which captures the quality aspect of financial inclusion as indicated by financial literacy, consumer protection, as well as inequalities and deficiencies in services.
The FI-Index has been designed without any "base year" and it reflects the cumulative efforts of all stakeholders over the years towards financial inclusion.
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