The Union Government on 29 September 2016 notified the constitution of the Monetary Policy Committee (MPC). The Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a statutory and institutionalised framework for a Monetary Policy Committee, for maintaining price stability. As per the provisions of the RBI Act, out of the sixMembers of Monetary Policy Committee, three Members will be from the RBI. The other three Members of MPC will be appointed by the Central Government.
In exercise of the powers conferred by section 45ZB of the Reserve Bank of India Act, 1934, the Union Government has accordingly constituted the Monetary Policy Committee of RBI, with the following composition:
• The Governor of the Bank: Chairperson, ex officio
• Deputy Governor of the Bank, in charge of Monetary Policy: Member, ex officio
• One officer of the Bank to be nominated by the Central Board: Member, ex officio
• Chetan Ghate, Professor, Indian Statistical Institute (ISI): Member
• Pami Dua, Director, Delhi School of Economics (DSE): Member
• Ravindra H. Dholakia, Professor, Indian Institute of Management (IIM) Ahmedabad: Member
The Members of the Monetary Policy Committee appointed by the Union Government will hold office for a period of four years, with immediate effect or until further orders, whichever is earlier.
About Monetary Policy Committee
• The Monetary Policy Committee will be entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level.
• A Committee-based approach for determining the Monetary Policy will add lot of value and transparency to monetary policy decisions.
• The meetings of the Monetary Policy Committee will be held at least 4 times a year and it will publish its decisions after each such meeting.