Monetary Policy Committee

  • MPC is headed by RBI governor, is a six-member panel, of which three members are from RBI and three are independent members selected by government. The independent members are experts in the field of economics, banking or finance.
  • The governor, however, will not enjoy a veto power to overrule the other panel members, but will have a casting vote in case of a tie. No government official will be nominated to the MPC.
  • MPC is expected to bring “value and transparency” to rate-setting decisions.
  • The MPC will meet four times a year to decide on monetary policy by a majority vote.
  • The committee was formed on the recommendation of Urjit Patel Committee, 2014.
  • MPC was constituted on many-heads-are-better-than-one approach and is expected to ensure that the decisions are not influenced by bias or lobbying.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s