The Reserve Bank of India (RBI) released the Financial Inclusion Index (FI-Index) for March 2025 via a press release dated July 22, 2025. RBI stated that the FI-Index rose to 67.0 in March 2025, a significant improvement from 64.2 in the same period in the previous year. The composite index, launched in August 2021, is an indicator of the nation's overall advancement in financial inclusion based on three critical dimensions: access, usage, and quality of financial services.
The FI-Index is prepared on an annual basis in consultation with the stakeholders, including the government, and is intended to capture the level of financial inclusion in the range of 0 to 100, with 0 being full exclusion and 100 being full inclusion. The increase in FY25 indicates that a larger number of individuals and enterprises are utilising formal financial products and services than in earlier years.
Growth Driven By Usage And Quality
RBI has cited the recent rise in the FI-Index to be mainly due to expansion of the 'usage' and 'quality' sub-indices. The 'usage' side defines the degree to which customers are indeed using financial services such as bank accounts, credit facilities, and electronic payments. The 'quality' side defines the degree to which financial services are being delivered effectively, including such areas as transparency, grievance redressal systems, and customer-centric service standards.
Though the availability of financial services continues to be a key consideration, the larger increase in usage and quality reflects that available financial infrastructure is being utilised and served better by enhanced standards of service. This is an extension of patterns in previous years, as financial inclusion has stepped up beyond mere account opening towards actual financial engagement.
Financial Literacy Driven by Digital Banking
Financial literacy and digital banking initiatives have contributed to a great extent in making such improvements possible. Banks, fintech firms, and microfinance institutions have introduced programs to raise public awareness of saving products, credit facilities, insurance coverage, and e-transactions over time.
RBI has also boosted digital financial services by focusing on safe payment platforms, mobile banking, and the accelerated takeoff of Unified Payments Interface (UPI) products. These activities have been of crucial importance to rural and semi-urban markets, where the penetration of banks was earlier restricted. More individuals are currently accessing formal financial services, reducing dependence on cash-based payments.
FI-Index was first launched in August 2021 for the financial year ending March 2021. The index has seen consistent increases since its launch, reflecting the collective impact of policy measures, improvement in infrastructure, and awareness drives.
