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.
