RBI’s MONETARY POLICY COMMITTEE : GOVERNOR’S ROLE REDUCED.
1. The Government has notified the formation of ” Monetary Policy Committee” (MPC) under the RBI. This committee will take decision on interest rate or Repo rate in a transparent manner in future.
2. MPC will bring significant changes in the power of the RBI Governor.
3. Under MPC, the Governor has a casting vote but doesn’t enjoy the veto power. Decisions will be taken on the basis of majority vote. It will be Team decision and not Governor’s decision alone.
4. There are six members in the MPC. Three are from the RBI including the Governor, a Deputy Governor (who will be the ex-officio chairperson) and one senior officer of the RBI.
5. The other three members will be appointed by the Central Government having expertise in banking, economics and finance.
Article by Shri Arvind Mannur on Face Book RBI’s Monetary Policy – Governor’s Role Reduced