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Source: The post is based on the article “Financial inclusion index inches up, all sub-indices rise: RBI” published in Indian Express on 3rd August 2022.
What is the News?
The Reserve Bank of India(RBI) has released the Financial Inclusion Index(FI-Index) for the year ending March 31, 2022.
What is the Financial Inclusion Index?
Released by: Reserve Bank of India(RBI).
Aim: To capture the extent of financial inclusion across the country.
Parameters: The index comprises three broad parameters — access (35% weightage), usage (45%) and quality (20%). Each of these parameters will consist of various dimensions, which are computed based on 97 indicators.
– The quality parameter includes aspects such as financial literacy, consumer protection, and inequalities and deficiencies in services.
Scores: 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.
Base Year: The index has been constructed without any “base year”. It reflects the cumulative efforts of all stakeholders.
What are the key findings of the index?
The extent of financial inclusion across the country has increased to 56.4 in March 2022 showing growth across parameters.
The index stood at 53.9 in March 2021. It was at 43.4 for the period ending March 2017. This shows rapid improvement in the reach of financial services over the past five years.