Financial Inclusion index
Part of: GS Prelims and GS- III – Economy
In news The Reserve Bank of India (RBI) announced the formation of a composite Financial Inclusion Index (FI-Index) to capture the extent of financial inclusion across the country.
- The FI-Index for the period ended March 2021 stood at 53.9 compared with 43.4 for the period ended March 2017.
About Financial Inclusion Index
- Annual Financial Inclusion Index (FII) will measure access and usage of a basket of formal financial products and services that includes savings, remittances, credit, insurance and pension products.
- It would rate states on their performance on last-mile banking services availability.
- The index will have three measurement dimensions
- access to financial services
- usage of financial services
- the quality of the products and the service delivery.
- These are also the G20 Financial Inclusion Indicators.
- It will be published in July every year by RBI.
- Importance of FII-
- Provide information on the level of financial inclusion.
- Measure financial services for use of internal policy making.
- It can be used directly as a composite measure in development indicators.
- It enables fulfilment of G20 Financial Inclusion Indicators requirements.
- It will also facilitate researchers to study the impact of financial inclusion and other macro-economic variables.
News Source: TH