RBI’s Financial Inclusion Index (FI-Index)

Context

Part A — Financial Inclusion Index (FI-Index)

Key Data (Verified)

• FY26: 70.0 vs FY25: 67.0 vs FY24: 64.2 — steady rise; growth across all three sub-indices.
• Improvement mainly driven by the Usage parameter — reflecting deepening (not just widening) of financial inclusion.

About the FI-Index

• Introduced by the RBI in August 2021 (first published for FY ending March 2021), in consultation with the government and sectoral regulators.
• Scale: 0 to 100 (0 = complete exclusion, 100 = full inclusion).
• Composite of 97 indicators across banking, investments, insurance, postal, and pension sectors.
• Three parameters with weights: Access (35%), Usage (45%), Quality (20%).
• No base year — a cumulative index built on the previous year’s value.

Part B — Prudential Norms on SNFA

What It Is

• Final prudential norms issued under the Resolution of Stressed Assets Directions, 2025, effective 1 October 2026.
• SNFA (Specified Non-Financial Asset): a non-financial asset (e.g. property/collateral) acquired by a Regulated Entity (RE) in settlement of a defaulted loan.

Key Restriction

• REs are prohibited from selling/transferring an SNFA back to the defaulting borrower, its promoters, related parties, or any entity acting on the borrower’s behalf.
• Aim: prevent defaulters from reacquiring their own assets at a discount after willful default — closing a moral-hazard loophole and strengthening credit discipline.

Practice MCQs

Q1. With reference to the RBI’s Financial Inclusion Index (FI-Index), consider the following statements:

1. It was introduced by the RBI in August 2021.
2. It is measured on a scale of 0 to 100 and has no base year.
3. Its three parameters are Access, Usage and Quality, with Usage carrying the highest weight.
4. For FY26 (March 2026), the index stood at 70.0.

How many of the above statements are correct? (a) Only one (b) Only two (c) Only three (d) All four (e) None

Q2. With reference to the RBI’s prudential norms on Specified Non-Financial Assets (SNFA), consider the following statements:

1. The norms were issued under the Resolution of Stressed Assets Directions, 2025.
2. Regulated Entities are barred from selling an SNFA back to the defaulting borrower or its related parties.
3. The framework comes into effect from 1 October 2026.
4. The FI-Index and the SNFA norms are both released by SEBI.

How many of the above statements are correct? (a) Only one (b) Only two (c) Only three (d) All four (e) None

Answer Key

1. (d) — All four statements are correct.
2. (c) — Statement 4 wrong: both are issued by the RBI, not SEBI.