RBI introduces financial inclusion index

The Reserve Bank of India on August 17 introduced an annual index to measure and improve the extent of financial inclusion in the country.

The financial inclusion index (FI-Index), to be published every July, will be a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with government and sectoral regulators, the central bank said in a release.

The FI-Index for the period ending March 2021 was 53.9 against 43.4 for the period ending March 2017.

The index captures information about different aspects of financial inclusion in a single value ranging between 0 to 100, where 0 represents financial exclusion and 100 indicates full financial inclusion, the central bank said.

The index comprises three broad parameters—usage (45 percent), access (35 percent) and quality (20 percent). These would be computed according to a number of indicators.

The index would be responsive to ease of access, availability and usage of services, and quality of services.

“A unique feature of the index is the quality parameter, which captures the quality aspect of financial inclusion as reflected by financial literacy, consumer protection, and inequalities and deficiencies in services,” the RBI said.

A base year has not been constructed as it reflects cumulative efforts of all stakeholders over the years toward financial inclusion, it said.

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