The Financial Inclusion (FI) Index is a vital measure introduced by the Reserve Bank of India (RBI) in 2021. This index evaluates the level of financial inclusion in India based on three critical parameters: access, usage, and quality of financial services. It aims to reflect how widely these services are available, how frequently they are utilized, and the overall quality of the services provided.
The FI Index has demonstrated consistent improvement since its inception:
This upward trend signifies substantial progress in financial inclusion across the nation, particularly regarding the increased usage of financial services.
The FI Index evaluates financial inclusion based on three key parameters, each assigned a specific weight:
The latest FI Index for March 2024 stands at 64.2, an increase from 60.1 in March 2023. This rise emphasizes significant advancements in financial inclusion, primarily driven by enhanced usage of financial services. The RBI attributes this progress to a deeper engagement with financial services among the population, indicating a positive trend towards greater financial literacy and economic empowerment.
Q1. What does the Financial Inclusion Index measure?
Answer: The Financial Inclusion Index measures access, usage, and quality of financial services available to the public in India, reflecting the overall financial inclusion levels.
Q2. How has the FI Index changed over the years?
Answer: Since its introduction in 2021, the FI Index has risen from 53.9% to 64.2% by March 2024, showcasing continuous improvement in financial inclusion across the country.
Q3. What are the key parameters of the FI Index?
Answer: The FI Index comprises three key parameters: access (35%), usage (45%), and quality (20%) of financial services, which together provide a comprehensive view of financial inclusion.
Q4. Why is financial inclusion important for India?
Answer: Financial inclusion is crucial for enhancing economic growth, reducing poverty, and improving the quality of life by ensuring access to essential financial services for all citizens.
Q5. What factors contribute to the rise in the FI Index?
Answer: Factors contributing to the rise in the FI Index include increased accessibility of financial services, greater public awareness, and enhanced engagement with financial institutions by the population.
Question 1: What is the main purpose of the Financial Inclusion Index?
A) To measure economic growth
B) To evaluate financial inclusion levels
C) To assess banking sector health
D) To determine interest rates
Correct Answer: B
Question 2: As of March 2024, what is the FI Index value?
A) 53.9%
B) 56.4%
C) 60.1%
D) 64.2%
Correct Answer: D
Question 3: Which parameter has the highest weight in the FI Index?
A) Access
B) Usage
C) Quality
D) None of the above
Correct Answer: B
Question 4: What percentage of the FI Index is dedicated to quality?
A) 35%
B) 45%
C) 20%
D) 10%
Correct Answer: C
Question 5: Who introduced the Financial Inclusion Index?
A) Ministry of Finance
B) Reserve Bank of India
C) Securities and Exchange Board of India
D) National Bank for Agriculture and Rural Development
Correct Answer: B
Question 6: What trend has the FI Index shown since its introduction?
A) Decline
B) No change
C) Continuous improvement
D) Fluctuation
Correct Answer: C
Question 7: Which of the following is a parameter of the FI Index?
A) Accessibility
B) Usability
C) Quality
D) All of the above
Correct Answer: C
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