October is important because after the US Federal Reserve recently cut its interest rates, the Reserve Bank of India will also announce its bi-monthly monetary policy. Monetary policy affects people’s EMIs and interest rates, from home to car loans. But even before this, RBI made a big change in the Monetary Policy Committee that makes decisions on interest rates.
Three members of the Reserve Bank of India’s 6-member monetary policy committee are from the bank, while three are from outside. RBI informed on Tuesday that 3 new external members have been included in the Monetary Policy Committee (MPC). The government has appointed Ram Singh, Saugata Bhattacharya, and Nagesh Kumar as new external members of the MPC of the Reserve Bank of India.
Introduction Of New Members Of RBI MPC
The government has reconstituted the Monetary Policy Committee (MPC) of the Reserve Bank of India, which decides the repo rate. The committee was reconstituted using the Reserve Bank of India Act-1934 powers.
Prof. Ram Singh, the Direc School of Economics, and director Saugata Bhattacharya are economists. Dr. Nagesh Kumar, the Director and CEO of the Institute of Industrial Development Studies, is among the committee’s new members. Before them, Dr Ashima Goyal, Jayant R. Verma, and Shashank Bhide were included as external members in the RBI MPC, and their tenure is ending this week.
Structure Of RBI MPC
According to the provisions of the RBI Act, the MPC has six members. Three members are appointed by RBI, and three by the Central Government. According to the Ministry of Finance statement, under Section 45ZB of the Reserve Bank of India Act-1934, the Central Government has reconstituted the Monetary Policy Committee of the Central Bank.
Apart from these 6 members in the MPC, the Governor of RBI is the Chairperson of the MPC. Apart from this, its member is the Deputy Governor in charge of monetary policy in the Reserve Bank. At the same time, RBI officials nominated by the Central Board are ex-officio members.
The external members of the MPC appointed by the Central Government will hold their posts for four years with immediate effect or until further orders, whichever is earlier. This time, the RBI Monetary Policy Committee meeting will be held from 7 to 9 October.
