RBI comes up with index for financial inclusion
MUMBAI: The Reserve Bank of India (RBI) on Tuesday introduced the financial inclusion index (FI-Index) to capture the extent of financial inclusion in the country. This was among the announcements made in the first bi-monthly monetary policy in April this year.
The FI-Index has been conceptualised as a comprehensive index incorporating details of banking, investments, insurance, postal, and the pension sector in consultation with government and respective sectoral regulators, RBI said. 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, including access, usage, and quality with each of these consisting of various dimensions computed on the basis of on several indicators.
The index is responsive to ease of access, availability and usage of services, and quality of services, comprising 97 indicators in all. A unique feature of 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, which will be published in July every year, 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. On July 15, 2021, RBI governor Shaktikanta Das had outlined three challenges in improving the financial inclusion infrastructure in India.
These parameters are the identification of the customer, reaching the last mile, and providing relevant, affordable and safe products, Das had said at a summit.