Appointment of 3 new members in the Monetary Policy Committee

Why in discussion?

• Recently the Central Government appointed 3 new members in the Monetary Policy Committee.
• These new members are Ram Singh, Saugata Bhattacharya and Nagesh Kumar.
• At present there are 6 members in the Monetary Policy Committee.
• Three other members –
  • RBI Governor: Shaktikanta Das
  • RBI Deputy Governor: Michael Patra
  • RBI Executive Director: Rajiv Ranjan

Monetary Policy Committee:

• The Monetary Policy Committee was formed in the year 2016 to make interest rate determination more useful and transparent.
• As per the provisions of the Reserve Bank of India Act, out of the six members of the Monetary Policy Committee, three members are from the Reserve Bank.
  • These include the Governor, a Deputy Governor and another officer.
• The other three members are appointed by the Central Government.
  • They are selected by a committee headed by the Cabinet Secretary.
  • Their tenure is 4 years, and they are not eligible for reappointment.
• The Governor of the Reserve Bank is the ex-officio Chairman of this committee.
• It is mandatory for the Monetary Policy Committee (MPC) to have 4 meetings in a year.
• The quorum for the meeting is four members.
• Decisions in the committee are taken on the basis of majority, and in case of a tie, the Governor of the Reserve Bank casts his deciding vote.