The first reading of the Reserve Bank of India’s annual Financial Inclusion (FI) Index for the period ending March 2021 has come in at 53.9 against 43.4 for the period ending March 2017.
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 (weights indicated in brackets) – Access (35 per cent), Usage (45 per cent), and Quality (20 per cent), with each of these consisting of various dimensions computed based on a number of indicators.
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The Index, which has been has been constructed without any ‘base year’ and as such reflects cumulative efforts of all stakeholders over the years towards financial inclusion, is responsive to ease of access, availability and usage of services, and quality of services, comprising all 97 indicators, the RBI said in a statement.
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, it added.
The FI Index, which will be published annually in July every year, 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.