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RBI's Financial Inclusion (FI) Index

Context

The Reserve Bank of India's (RBI) Financial Inclusion (FI) Index rose to 64.2 in March 2024 (compared to 60.1 in March 2023), showing growth across all parameters.

About the Index

The RBI's FI Index measures the level of financial inclusion in India, scoring between 0 (complete exclusion) and 100 (full inclusion).
Parameters: The FI Index comprises:
- Access (35%): Measures the ease of accessing financial services.
- Usage (45%): Evaluates the extent to which financial services are utilized by the population.
- Quality (20%): Assesses the standard and reliability of financial services provided.
Implications: The increase in the FI Index suggests improvements in access, usage, and service quality of financial services across India. This growth reflects efforts to enhance financial inclusion, enabling more people to benefit from banking services.

Government Schemes for Financial Inclusion

Pradhan Mantri Jan Dhan Yojana (PMJDY): It is a national mission for financial inclusion to ensure access to financial services
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): It is an insurance scheme offering life insurance cover for death due to any reason.
Pradhan Mantri Suraksha Bima Yojana (PMSBY): The scheme is available to people in the age group 18 to 70 years with a bank account. It is an Accident Insurance Scheme offering accidental death and disability.
Atal Pension Yojana (APY): It aims to create a universal social security system for all Indians, especially the poor, the under-privileged and the workers in the unorganised sector. APY is administered by Pension Fund Regulatory and Development Authority (PFRDA).
Pradhan Mantri Mudra Yojana (PMMY): Under the scheme a loan of upto ?50,000 is given under sub-scheme ‘Shishu’; between ?50,000 to ?5.0 Lakhs under sub-scheme ‘Kishore’; and between ?5.0 Lakhs to ?10.0 Lakhs under sub-scheme ‘Tarun’.
Stand-Up India Scheme: The scheme facilitates bank loans between ?10 lakh and ?1 crore to at least one Scheduled Caste (SC)/ Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting up greenfield enterprises.

PYQ

Q: With reference to India, consider the following: (2010)

Nationalization of Banks
Formation of Regional Rural Banks
Adoption of villages by Bank Branches

Which of the above can be considered as steps taken to achieve the “financial inclusion” in India?

1 and 2 only
2 and 3 only
3 only
1, 2 and 3

Solution: (d)

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RBI's Financial Inclusion (FI) Index

About the Index

Government Schemes for Financial Inclusion

PYQ

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