Financial Inclusion Index (FI Index)

It is the first composite Financial Inclusion index launched in India by the RBI in August 2021.

  • It aims to capture and improve the extent of financial inclusion in the country. It captures information on various aspects of financial inclusion in a single value ranging between 0 and 100. A value of 0 represents complete financial exclusion and 100 indicate full financial inclusion.

Parameters: The Index is based on three broad parameters –

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

Key Features

  • It will include details of banking, investments, insurance, postal and pension sector.
  • It will be published annually in July every year.
  • It has been created without any base year and it reflects cumulative efforts of all stakeholders over the years towards financial inclusion.

Index Value: The first reading of the Index for the period ending March 2021 is 53.9, which has improved from 43.4 since March 2017.

Advantages

  • It can be used directly as a composite measure in development indicators and policy making.
  • It will assist in improving the quality of financial inclusion.
  • It will also facilitate researchers to study the impact of financial inclusion and other macro-economic variables.

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