The Reserve Bank of India on Tuesday initiated the financial inclusion index to capture the extent of financial inclusion in the country. This was part of the declarations made in the first bi-monthly monetary policy in April this year.
As per RBI, the FI-Index has been conceptualised as a comprehensive index incorporating details of banking, investments, insurance, postal and the pension segment in consultation with the 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 entire financial exclusion and 100 indicates full financial inclusion.
The FI-Index comprises three broad parameters which consists access, usage, and quality with each of these consisting 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 created 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 would be published yearly in July every year.
On 15 July 2021, RBI governor Shaktikanta Das had outlined three challenges when it comes to enhancing the financial inclusion infrastructure in India.
Talking at the Economic Times Financial Inclusion Summit 2021, Das had said that these parameters are the identification of the customer, reaching the last mile and offering relevant, affordable and safe products. While the disclosing of Pradhan Mantri Jan-Dhan Yojana accounts has assisted millions of Indians access financial products, the steps taken on the demand side are aimed at increasing public awareness, he said.