“FINANCIAL INCLUSION INDEX IN INDIA RISES TO 64.2 IN MARCH 2024”

Why in the news?

The Financial Inclusion Index (FI-Index) in India rose to 64.2 in March 2024, showing growth across all sub-indices.
RBI reports improved access, usage, and quality of financial services, indicating enhanced financial inclusion nationwide.

Source: quora

About Financial Inclusion Index (FI-Index):

Comprehensive Index: Includes banking, investments, insurance, postal, and pension sectors, developed by RBI in 2021.
Publication: Released annually in July without a specific base year.
Purpose: Measures the extent of financial inclusion nationwide.
Structure: Single value from 0 to 100, where 0 denotes complete financial exclusion and 100 indicates full financial inclusion.
Components: Comprises Access (35%), Usage (45%), and Quality (20%) parameters.
Indicators: Consists of 97 indicators assessing ease of access, service availability, usage, and service quality.

About Reserve Bank of India (RBI):

Central Bank: India’s central bank and regulatory body
Establishment: Founded in 1934 under the Reserve Bank of India Act
Origins: Based on recommendations of the 1926 Royal Commission on Indian Currency and Finance (Hilton Young Commission).
Fully owned by the Ministry of Finance, Government of India, since nationalisation (1949).

Role:

Monetary Authority:Formulates, implements, and monitors monetary policy.
Regulator and Supervisor of the Financial System:Prescribes parameters for banking operations.
Manager of Foreign Exchange:Manages Foreign Exchange Management Act, 1999.

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