Financial Inclusion Index for FY-2024 released by RBI

Financial inclusion nationwide, rose to 64.2 in March 2024 from 60.1 in March 2023. Know all about the RBI Financial Inclusion Index for the FY 2024 in detail.

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Context: RBI released the Financial Inclusion Index for the FY-2024.

Financial Inclusion Index 2024

The financial inclusion index for FY 2024 stands at 64.2 up from 60.1 in March 2023.
According to RBI improvement in the FI-Index is mainly contributed by the usage dimension reflecting deepening of financial inclusion.

Financial Inclusion Index Facts

About Financial Inclusion Index
Coverage	It incorporates details of banking, investment, insurance, postal, and pension sectors.
Developed	In consultation with the government and respective sector regulators.
Published By	Reserve Bank Of India (RBI)
Frequency	Released annually in July each year.
Scale	The index captures information on various aspects of financial inclusion in a single value ranging between 0 and 100, where 0 represents complete financial exclusion and 100 indicates full financial inclusion.
Base Year	The FI-Index has been constructed without any ‘base year’ and as such it reflects the cumulative efforts of all stakeholders over the years towards financial inclusion.

Composition of Financial Inclusion Index

The FI-Index comprises three broad parameters:

Access to financial institutions: 35%
Usage: 45%
Quality: 20%.
Each of these consists of various dimensions, which are computed based on a number of indicators.
Quality parameter: It captures the quality aspect of financial inclusion as reflected by financial literacy, consumer protection, and inequalities and deficiencies in services.

What is Financial Inclusion?

It is defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low-income groups at an affordable cost.