In news- The Reserve Bank of India (RBI) has introduced the financial inclusion index (FI-Index) to capture the extent of financial inclusion in the country.
About Financial Inclusion Index (FI-Index)
- The FI-Index has been conceptualised as a comprehensive index incorporating details of banking, investments, insurance, postal as well as the pension sector in consultation with Government and respective sectoral regulators.
- 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.
- The FI-Index comprises three broad parameters (weights indicated in brackets) viz.,
- Access (35%).
- Usage (45%) and
- Quality (20%)
- Each of these parameters consists of various dimensions, which are computed based on a number of indicators.
- The Index is responsive to ease of access, availability and usage of services, and quality of services, comprising all 97 indicators.
- 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 FI-Index has been constructed without any ‘base year’ and as such it reflects cumulative efforts of all stakeholders over the years towards financial inclusion.
- The annual FI-Index for the period ending March 2021 is 53.9 as against 43.4 for the period ending March 2017.
- The FI-Index will be published annually in July every year.