RBI unveils FI-Index
GS Paper - 3 (Economy)
A Financial Inclusion Index (FI-Index) to capture the extent of financial inclusion is now ready. The Reserve Bank of India informed about its formation on 17 August 2021. The annual FI-Index for the period ending March 2021 is 53.9 as against 43.4 for the period ending March 2017, showing drastic improvement in the past four years. The index will be published annually in July every year.
- The information on various aspects of financial inclusion will be measured in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.
- The index will be responsive to ease of access, availability and usage of services, and quality of services, comprising 97 indicators.
- It will also capture the quality aspect of financial inclusion as reflected by financial literacy, consumer protection, and inequalities and deficiencies in services.
- It will capture the details of banking, investments, insurance, postal as well as the pension sector details to understand the extent of financial inclusion.
- The FI-Index comprises three broad parameters such as access with 35% weightage, usage (45% weightage) and quality (20% weightage) with each of these consisting of various dimensions, which are computed based on a number of indicators.
- There is no base year and therefore it would reflect cumulative efforts of all stakeholders over the years towards financial inclusion.