RBI reports rise in financial inclusion index with growth across all segments

RBI on financial inclusion: The Reserve Bank of India's (RBI) Financial Inclusion (FI) Index, which measures the extent of financial inclusion across the country, rose to 64.2 in March 2024, showing growth across all parameters.

The index captures various aspects of financial inclusion in a single value ranging from 0 to 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.

"The value of the index for March 2024 stands at 64.2 compared to 60.1 in March 2023, with growth seen across all sub-indices," the RBI stated on Tuesday.

The improvement in the FI-Index is primarily attributed to the usage dimension, reflecting a deepening of financial inclusion.

The FI-Index consists of three broad parameters: access (35 per cent), usage (45 per cent), and quality (20 per cent), each of which comprises various dimensions computed based on a number of indicators.

In August 2021, the central bank announced that the FI-Index had been conceptualised as a comprehensive measure incorporating details of banking, investments, insurance, postal services, and the pension sector, in consultation with the government and respective sectoral regulators.

The index is responsive to the ease of access, availability and usage of services, and the quality of services provided.

According to the 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.

(With PTI inputs)