Reserve Bank of India's Financial Inclusion Index
The Reserve Bank of India (RBI) has reported an increase in its financial inclusion index to 67 for the fiscal year ending March 2025 (FY25), up from 64.2 in the previous year.
Growth Across Sub-Indices
- The growth was noted across all sub-indices:
- Access
- Usage
- Quality
Contributions to Index Improvement
According to RBI, the improvement in the Financial Inclusion Index (FI-Index) for FY25 is primarily due to:
- Increased usage and quality of financial services.
- Sustained efforts in financial literacy initiatives.
Significance of the Index Increase
- The rise to 67 signifies a shift from mere access to real usage and trust in financial services.
- Reflects the success of efforts to integrate underserved communities into the formal financial system.
Background and Composition of the FI-Index
The Financial Inclusion Index was first introduced in August 2021 for FY21. It is a comprehensive measure that encompasses multiple sectors:
- Banking
- Investments
- Insurance
- Postal services
- Pension sector
The index ranges between 0 and 100, where:
- 0 indicates complete financial exclusion
- 100 indicates full financial inclusion
Parameters of the FI-Index
- Access - 35% weightage
- Usage - 45% weightage
- Quality - 20% weightage
Impact of Initiatives
India has made significant advancements in financial inclusion through initiatives such as the Jan Dhan Yojana:
- Total of 558.3 million accounts opened
- 372.6 million in rural and semi-urban areas
- 185.7 million in metro areas
- 311.3 million accounts opened for female beneficiaries