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Source: Livemint and Business Standard
What is the News?
The Reserve Bank of India has released India’s First composite Financial Inclusion Index (FI-Index).
About Financial Inclusion Index(FI-Index):
- Released by: Reserve Bank of India(RBI)
- Aim: To capture the extent of financial inclusion across the country.
- Parameters: The index comprises three broad parameters — access (35% weightage), usage (45%) and quality (20%). Each of these parameters will consist of various dimensions, which are computed based on 97 indicators.
- Unique Feature: A unique feature of the index is the parameter related to the quality of financial inclusion. It captures information related to financial literacy, consumer protection and inequalities and deficiencies in services,
- Scores: The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100 where 0 represents complete financial exclusion and 100 indicates full financial inclusion.
- When it will be published? The index will be published in July every year.
- Base Year: The index has been constructed without any “base year”. It reflects the cumulative efforts of all stakeholders.
Key Findings of the Index:
- The FI-Index for the financial year ended March 2021 crossed the halfway mark to 53.9, as compared to 43.4 for the year ended March 2017.
- This indicates that 46.1% of the parameters considered are still financially excluded, despite the launch of several initiatives by the Government.
