The Reserve Bank of India (RBI) has reported a notable rise in its Financial Inclusion Index (FI-Index) for FY2024-25, attributing the improvement to better usage of financial services, enhanced service quality, and strengthened financial literacy efforts across the country.

In a statement released on Monday (July 21, 2025), the central bank said that all three broad parameters of the FI-Index—access, usage, and quality—showed growth this year, with the highest contribution coming from increased adoption and responsible usage of financial services.

What is the Financial Inclusion Index?

The FI-Index was first published by the RBI in August 2021, and it reflects the extent of financial inclusion across the country. The index is prepared in consultation with the Government of India and other stakeholders, and covers a range of indicators, including:

• Access to banking infrastructure

• Usage of digital and traditional financial services

• Financial literacy and awareness

• Quality of grievance redressal mechanisms

• Credit availability and savings patterns

The index is published annually, and its rising trend in FY25 indicates that India is making tangible progress in reaching underserved and unbanked populations, especially in rural and semi-urban areas.

Financial Literacy Push Yields Results

The RBI noted that ongoing financial education programmes, both at the national and state levels, have played a major role in influencing financial behavior. Campaigns like the ‘Financial Literacy Week’, digital outreach through the Jan Dhan platform, and the strengthening of Banking Correspondent networks have contributed to wider financial participation.

This year, the quality dimension of the index — which includes aspects like customer protection, effective grievance redressal and transparency — also saw noteworthy improvements.

Government: Bank Frauds Fall Sharply in FY25

In a related development, the government informed Parliament that the number of fraud cases reported in Indian banks and financial institutions dropped significantly in FY25.

According to data presented on July 21, 2025:

• Fraud cases fell from 3.22 lakh in FY24 to around 1.25 lakh in FY25

• This marks a year-on-year decline of more than 61%

• The drop has been attributed to tightened risk controls, improved surveillance, and tech-driven early warning systems

No Spike in Frauds: Govt Counters Misleading Claims

There had been recent claims suggesting a spike in bank frauds in the early part of FY25. However, the Ministry of Finance categorically denied these claims in Parliament, stating:

“There has been no eightfold increase in bank frauds in the first half of this financial year. On the contrary, the overall number of frauds has substantially reduced.”

The government emphasized that regulatory improvements, stringent compliance checks, and greater public awareness have helped bring down fraudulent activities, particularly in the banking and digital payments ecosystem.

Detailed Data on Digital & Cyber Frauds Shared

Responding to concerns over cyber frauds, app-based lending scams, and UPI-related fraud cases, the government also shared a five-year compilation of fraud data, covering:

• Bank-wise distribution of fraud cases

• State-wise impact, including for Odisha and other major States

• Types of frauds – from phishing and ATM skimming to mobile loan app scams

The detailed annexures were tabled in the Lok Sabha as part of a comprehensive reply to MPs’ queries on the state of financial fraud and digital safety.

Conclusion: Strong Signs of Financial Health and Trust

The rising Financial Inclusion Index along with the sharp fall in fraud cases marks a positive dual development for India’s financial ecosystem in FY25.

With increased confidence in digital financial services, stronger security protocols, and expanding literacy efforts, both the RBI and the government appear to be working in tandem to deepen financial inclusion while protecting consumers from fraudulent risks.

These developments are expected to strengthen public trust, encourage more first-time users, and support the government's aim to build a digitally empowered, financially aware India.

The Upcoming IPOs in this week and coming weeks are Sellowrap Industries, Repono, Shanti Gold International, Indiqube Spaces, GNG Electronics, Brigade Hotel Ventures, Patel Chem Specialities, TSC India, NSDL.

The Current active IPO are Monarch Surveyors & Engineering Consultants, Swastika Castal, Savy Infra.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.