RBI introduced Financial Inclusion Index
The Reserve Bank of India introduced the financial inclusion index on August 17, 2021.
- The Financial Inclusion Index will be used to capture the extent of financial inclusion in India.
- This index was part of the announcements made in first bi-monthly monetary policy of April 2021.
About Financial Inclusion Index (FI Index)
- Financial Inclusion Index has been conceptualised as a comprehensive index comprising the details of banking, insurance, investments, postal and pension sector in consultation with government and sectoral regulators.
- It captures information on different aspects of financial inclusion in a single value in the range of 0 and 100.
- 0 indicates complete financial exclusion while 100 indicates complete financial inclusion.
- It comprises of three broad parameters such as Access, Usage, and Quality. Each of these parameters comprises of various dimensions, that are computed on the basis of different indicators.
- It is responsive to ease of access, availability & usage of services along with quality of services, comprising of all 97 indicators.
Unique feature of the Index
Unique feature is its quality parameter that captures the quality aspect of financial inclusion on the line of financial literacy, consumer protection etc.
Base-year of index
FI-Index has been created without any base year. It reflects cumulative efforts of all stakeholders towards financial inclusion. It will be published annually in July.
Challenges of Financial Inclusion
According to RBI governor Shaktikanta Das, there are three challenges of improving financial inclusion infrastructure across India:
- Identification of the customer
- Reaching the last mile and
- Providing relevant, affordable and safe products.
Category: Economy & Banking Current Affairs
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