WHY IN THE NEWS?
- The Reserve Bank of India has introduced the Financial Inclusion Index (FI-Index), which is a measure of the extent of financial inclusion in India.
- FI-Index incorporates the inclusion details of banking, investments, insurance, postal and pension sectors in India. This was among the announcements made in the first bi-monthly monetary policy in April this year.
- The value of FI-Index will range between 0 to 100. Where 0 denotes complete financial exclusion while 100 denotes full financial inclusion.
- Parameters of FI-Index: The FI-Index comprises of three parameters, namely- Access (35%), Usage (45%), and Quality (20%) with each of these consisting of various dimensions, which are computed based on a number of indicators. In total there are 97 indicators.
The annual FI-Index for the period ending March 2021 is 53.9 while for the period ending March 2017 it is 43.4. RBI will release the FI-Index in the month of July every year. There is no base year for this Index