Financial Inclusion Index, Key Features and Core Parameters

The Financial Inclusion Index (FI Index) measures the extent of financial inclusion in India based on access, usage, and quality of financial services, promoting inclusive economic growth.

Table of Contents

Context: The Reserve Bank of India has reported an improvement in the Financial Inclusion Index, which has risen to 67% in FY 2025, up from 64.2% in FY 2024.

About the Financial Inclusion Index (FI-Index)

The Financial Inclusion Index (FI-Index) is a composite measure designed to track the level of financial inclusion across India.
Developed by the Reserve Bank of India in consultation with the Government and sectoral regulators (banking, insurance, pension, etc.).
It covers five key sectors: Banking, Investments, Insurance, Postal Services, and Pensions.

Facts Related to Financial Inclusion Index

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?

Financial Inclusion 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.

Scoring System

The index assigns a score between 0 and 100:
- 0 indicates complete financial exclusion.
- 100 represents full financial inclusion.
The FI-Index for FY 2025 stands at 67, an improvement from 2 in FY 2024.

Three Core Parameters

Access (35%): Measures availability of financial services (e.g., bank branches, ATMs).
Usage (45%): Captures the actual use of financial services (e.g., credit, savings, transactions).
Quality (20%): Reflects financial literacy, consumer protection, and service inequalities.

Key Features

Based on 97 indicators covering diverse aspects of financial access and behaviour.
The Quality parameter is a unique feature, emphasising the depth and fairness of inclusion.
The index is cumulative, meaning it reflects progress over time and does not use a base year.