India’s financial inclusion is showing significant progress, with the Reserve Bank of India’s (RBI) Financial Inclusion Index (FI-Index) rising to 67 in March 2025, up from 64.2 last year.
Understanding the FI-Index
The FI-Index is a comprehensive measure designed by the RBI to track the extent of financial inclusion across India. It considers various aspects of banking, investments, insurance, postal services, and the pension sector.
The index is scored on a scale from 0 to 100, where 0 signifies complete financial exclusion and 100 represents full financial inclusion. It serves as a single value to capture the nationwide progress.
Driving the Growth
For the fiscal year 2025, all three key components of the FI-Index saw an uplift: access, usage, and quality. The RBI specifically highlighted that improvements in the “usage” and “quality” dimensions were major contributors.
This suggests that not only are more people gaining access to financial services, but they are also actively using them, and the quality of these services, alongside financial literacy efforts, is improving.
Experts Weigh In
Industry leaders are optimistic about this positive trend. Dilip Modi, Founder and CEO of Spice Money, emphasized that the rise signals deep financial empowerment, especially in rural areas. He noted that the focus is shifting from just providing access to ensuring genuine impact through usage, service quality, and financial literacy.
Deepak Verma, Managing Director and CEO of fintech firm Findi, echoed this sentiment. He stated that the consistent increase in the index reflects successful collaborative efforts across the financial ecosystem to bring underserved communities into the formal financial system in a meaningful way.
How the FI-Index is Calculated
The FI-Index is structured around three main parameters, each carrying a specific weight. “Access” accounts for 35% of the score, “Usage” holds the largest weight at 45%, and “Quality” contributes 20%.
A unique aspect of this index is the “Quality” parameter. It assesses factors like financial literacy, consumer protection measures, and addresses any inequalities or deficiencies in financial services provided. This ensures that inclusion isn’t just about availability but also about the effectiveness and fairness of services.
The FI-Index doesn’t rely on a base year, meaning it cumulatively reflects all the efforts made by various stakeholders over time towards achieving financial inclusion. For context, the index stood at 53.9 in March 2021 and 43.4 in March 2017, showcasing a steady upward trajectory.
- The RBI’s Financial Inclusion Index reached 67 in March 2025, up from 64.2 in March 2024.
- Growth was seen across all three sub-indices: access, usage, and quality.
- Improved usage and quality, alongside financial literacy, are key drivers of this progress.
- The index measures financial inclusion from 0 (exclusion) to 100 (full inclusion).
- It incorporates banking, investments, insurance, postal services, and pensions.
This continued growth in financial inclusion underscores India’s commitment to ensuring broader access to crucial financial services for all its citizens.
