The value of the financial inclusion index (FI Index) for March 2023 stands at 60.1 as against 56.4 in March 2022, according to a statement released by the Reserve Bank of India (RBI) on September 15, 2023.
“The FI-Index has been constructed without any ‘base year’ and it reflects cumulative efforts of all stakeholders over the years towards financial inclusion,” RBI said in a statement.
The annual FI-Index for the period ending March 2021 was 53.9 as against 43.4 for the period ending March 2017. The FI-Index will be published annually in July every year, the statement added.
Financial inclusion refers to the efforts to provide access of financial tools and products to various segments of the society. In India, several banks, non-banking financial companies (NBFCs), micro-finance institutions (MFIs) and fintech companies are active in this field.
According to RBI, the National Strategy for Financial Inclusion 2019-2024 (NSFI) and National Strategy for Financial Education 2020-2025 (NSFE) provide a roadmap for a coordinated approach towards financial inclusion, financial literacy, and consumer protection.
RBI had introduced the FI-Index in 2021 with the purpose of capturing the extent of financial inclusion across the country. The central bank had recognised that greater financial inclusion (FI) is crucial for a wider, inclusive and sustainable growth.
RBI said that FI 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.
It comprises of three broad parameters – access (35 per cent), usage (45 per cent), and quality (20 per cent), each consisting of various dimensions, which are themselves calculated based on many indicators. The index is responsive to ease of access, availability and usage of services, and quality of services, according to a PTI report.
According to RBI, 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 RBI document further highlighted that the Pradhan Mantri Jan Dhan Yojana (PMJDY) was a major milestone for financial inclusion and the “evolution, promotion and adoption of digital channels in recent years” have also been major contributors.
“The Jan Dhan, Aadhaar and Mobile (JAM) eco-system has brought about a major shift in the field of financial inclusion and several initiatives have been taken to universalise digital payments in a convenient, safe, secure, transparent and affordable manner,” it said.
