RBI's Financial Inclusion Index rises to 56.4 in March

RBI's Financial Inclusion Index rises to 56.4 in March

 Recently the Reserve Bank of India (RBI) has released the Composite Financial Inclusion Index (FI- Index). The annual FI-index is 56.4 in the financial year ending March 2022, as against 53.9 during the year ending March 2021. The index measures the status of financial inclusion across various sectors in the country with an increase in all parameters.

Financial Inclusion Index

 The Financial Inclusion Index has been conceptualized as a comprehensive index that includes details of the banking, insurance, investment, postal and pension sectors in consultation with the government and sectoral regulators. It is published annually in July every year.

 The FI-Index has been constructed without any 'Base Year' and thus reflects the shared efforts of all stakeholders over the years towards Financial Inclusion.

 Its goal is to create a comprehensive Financial Inclusion Index to measure the extent of financial inclusion across the country.

 The index captures information on various aspects of financial inclusion in a single number between 0 and 100, where 0 represents complete financial exclusion, and 100 represents complete financial inclusion. It consists of three broad parameters (weightage shown in parentheses) namely access (35%), utilization (45%) and quality (20%), each of which comprises different dimensions, which are calculated based on certain indicators.

 The index is responsive to the access, availability and ease of use of services and to measure the quality of services, covering all 97 indicators.