Financial inclusion shaping rate-setting decisions now: RBI's Michael Patra

Financial inclusion lowest in rural and agriculture-dependent areas where food is the main source of income, say deputy governor.

Financial inclusion is increasingly influence monetary policy and a formal system to gauge it helps, said Michael Patra, deputy governor at the Reserve Bank of India (RBI), on Friday.

The RBI launched a national financial inclusion index (FI-Index) in September, using 97 indicators to gauge financial inclusion. According to it, the country has achieved just about half of its goal in financial inclusion.

“Furthermore, a measurable indicator of financial inclusion can be incorporated into monetary policy rules and reaction functions to examine its correlation with output and inflation and their volatility. For the first time, the influence of financial inclusion