RBI introduces the Financial Inclusion Index
- The Reserve Bank of India has introduced the Financial Inclusion Index (FI-Index), which is a measure of the extent of financial inclusion in India. FI-Index incorporates the inclusion details of banking, investments, insurance, postal and pension sector in India.
- The value of FI-Index will range between 0 to 100. Where 0 denotes complete financial exclusion while 100 denotes full financial inclusion.
- Parameters of FI-Index: The FI-Index comprises of three parameters, namely- Access (35%), Usage (45%), and Quality (20%) with each of these consisting of various dimensions, which are computed based on a number of indicators. In total there are 97 indicators.
- The annual FI-Index for the period ending March 2021 is 53.9 while for the period ending March 2017 it is 43.4. RBI will release the FI-Index in the month of July every year. There is no base year for this Index.
Points to remember:
- FI Index for year ended March 2021?= 53.9
- FI Index for year ended March 2017?= 43.4
- Periodicity and month of release of FI-Index?= Yearly in July
- Number of parameters in FI-index?=3
- Base year for FI-Index?= None
Source: RBI
What is Financial Inclusion?- Financial Inclusion means the that financial products (like banking services) are provided to everyone i.e the inclusion of every individual in the domain of financial services.