The Reserve Bank of India (RBI) has introduced the Financial Inclusion Index (FI-Index) to evaluate the extent of financial inclusion in the country. It was announced in the first bi-monthly monetary policy in April for the year 2021-2022.
As a comprehensive index, the FI-index covers details of banking, investment, insurance, postal and pension sectors in consultation with the government and sector-related regulators.
The Financial Inclusion Index captures details on different aspects of financial inclusion in a range of 0 to 100, where 0 shows complete financial exclusion and 100 refers to full financial inclusion.
This index comprises three major parameters which include Usage (45%), Access (35%), and Quality (20%). Also, the index is responsive to easy accessibility, availability, and usage of services, as well as the quality of services, comprising 97 indicators overall. The quality parameter is an important feature here, capturing the quality aspect of financial inclusion, as reflected by financial literacy, consumer protection, and inequalities and gaps in services.
Reflecting cumulative efforts of all stakeholders towards financial inclusion, the FI-Index will be published annually in July.
As per RBI’s assessment, the annual FI-Index for the period ended March 2021 was 53.9, as against 43.4 for the period ended March 2017, showing improvement in access to financial services.