Why in the News?
The Reserve Bank of India (RBI) has announced that the Financial Inclusion Index (FI-Index) for Financial Year (FY) 2025 has risen to 67.0, up from 64.2 in FY 2024.
About Financial Inclusion Index (FI-Index):
- Developer: Created by the Reserve Bank of India to assess the extent of financial inclusion in India.
- First Release: Published in August 2021 for the financial year ending March 2021.
- Coverage: Encompasses five key sectors—banking, investments, insurance, postal services, and pensions.
- Scoring Scale: Ranges from 0 (total exclusion) to 100 (full inclusion).
- Update Cycle: Updated annually in July; cumulative index with NO base year.
- Indicators: Based on 97 indicators across all five sectors to ensure comprehensive assessment.
- Key Parameters:
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- Access (35%): Measures availability of financial infrastructure like bank branches, automated teller machines, and postal outlets.
- Usage (45%): Tracks frequency of use of services like savings, loans, insurance, and pension schemes.
- Quality (20%): Assesses financial literacy, consumer protection, equity, and service reliability.
India’s Performance Over the Years:
- March 2017: Index at 43.4, reflecting the initial phase of inclusion efforts.
- March 2021: Rose to 53.9, due to the expansion of banking and digital infrastructure.
- March 2024: Improved to 64.2, with broader access and increased adoption of financial services.
- March 2025: Reached 67.0, driven by digital transactions, better service quality, and financial literacy campaigns.
| [UPSC 2016] The establishment of ‘Payment Banks’ is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context?
1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of Payment Banks 2. Payment Banks can issue both credit cards and debit cards 3. Payment Banks cannot undertake lending activities Options: (a) 1 and 2 only (b) 1 and 3 only* (c) 2 only (d) 1, 2 and 3 |
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