The Reserve Bank of India has created a composite Financial Inclusion Index (FI-Index) to capture the extent of financial inclusion across the country. The announcement regarding the creation of the Financial Inclusion Index was made in the first Bi-monthly Monetary Policy Statement for 2021-2022 on April 7.
The annual FI-Index for the period ending March 2021 is 53.9 against 43.4 for the period ending March 2017. The FI-Index will be published annually in July every year, the RBI said in a statement.
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.
It also captures information on the financial inclusion aspects in a single value ranging between 0-100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.
The FI-Index comprises three broad parameters -- Access (35%), Usage (45%), and Quality (20%), with each of these consisting of dimensions computed based on many indicators.
The Index is also responsive to the ease of access, availability and the usage of services, and the 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 the 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.
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