Reserve Bank of India unveils its first financial inclusion index at 53.9 | Daily Current Affairs 2021

Reserve Bank of India unveils its first financial inclusion index at 53.9

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FI-Index: The Reserve Bank of India (RBI), on 17 August 2021 announced the formation of a composite Financial Inclusion Index (FI-Index) to capture the extent of financial inclusion across the country.

  • The annual FI-Index for the period ended March 2021 stood at 53.9 compared with 43.4 for the period ended March 2017.

About FI-Index:

  • RBI’s financial inclusion index (FI-Index) will be published annually in July.
  • It is a comprehensive index that incorporates details of banking, investments, insurance, postal as well as the pension sector.
  • It is created in consultation with the government and respective sectoral regulators.
  • There is no base year for this Index so it reflects the cumulative efforts of all stakeholders over the years towards financial inclusion.
  • The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100.
  • The 0 represents complete financial exclusion while 100 indicates full financial inclusion.
  • The Financial Inclusion Index has been framed based on three broad parameters—

1. Usage (45 percent)

2. Access (35 percent)

3. Quality (20 percent)

  • The parameters were computed based on 97 indicators.
  • The Financial Inclusion Index will be responsive to ease of access, availability and usage of services, and quality of services.

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