The Monetary Policy Committee (MPC) was formed in the year 2016 to make changes in the appropriate interest rates and policy rates for the monetary policy of the country.
The Monetary Policy Committee holds its meeting every quarter. The meeting of this committee is chaired by a Governor of the Reserve Bank. Here you can learn the function of RBI.
What Is Monetary Policy?
Monetary policy Describes the policy of the Reserve Bank of India through which the monetary policy of India or any other country is controlled in such a way that the economic development of the country can be promoted without increasing inflation in the country.
It is known that RBI; The Reserve Bank of India is authorized to make monetary policy under the Act, 1934.
Therefore, monetary policy refers to the debt control measures adopted by a country’s central bank.
According to the Chakravarty Committee; Price stability, economic development, economic equality, social justice, promotion and nurturing of new monetary and financial institutions are important objectives of monetary policy in India.
The RBI always tries to reduce the rate of inflation or keep it within a sustainable range, while the Government of India, on the other hand, focuses on accelerating the country’s GDP growth.
What is Monetary Policy Committee?
The Monetary Policy Committee (MPC) is constituted by the Central Government under Section 45ZB.
MPC Determines the important policy rates like repo rate, reverse repo rate, marginal standing facility rate, bank rate, etc. for the development of different regions of the country.
A 6-member Monetary Policy Committee (MPC) is constituted as per Section 45ZB of the RBI Act, 1934, as amended by the Central Government.
The first meeting of the Monetary Policy Committee was held on October 3, 2016.
The Reserve Bank’s Monetary Policy Department (MPD) assists the MPC in formulating monetary policy.
The members included in the Monetary Policy Committee in April 2019 are as follows;
1. Governor of Reserve Bank of India – Chairman, ex-officer (Shri Shaktikanta Das)
2. The Deputy Governor of the Reserve Bank of India, in charge of monetary policy – Member, ex-officer (Dr. Viral V. Acharya)
3. An officer of the Reserve Bank of India is nominated by the Central Board – ex-officio member (Dr. Michael Devvrat Patra)
4. Dr. Ravindra Dholakia, Professor, Indian Institute of Management, Ahmedabad – Member
5. Professor Pami Dua, Director, Delhi School of Economics – Member
6. Shri Chetan Ghate, Professor, Indian Statistical Institute (ISI) – Member
Except for the ex-officio members, all the remaining members hold office for 4 years or till further orders.
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