3 new members appointed to the Monetary Policy Committee of the RBI

The Government of India has reconstituted the Monetary Policy Committee of the Reserve Bank of India and appointed three new members: Prof. Ram Singh, Saugata Bhattacharya, and Dr. Nagesh Kumar.

The Finance Act of 2016 amended the Reserve Bank of India Act 1934 and provided for a six-member Monetary Policy Committee. The central government notified the first Monetary Policy Committee of the Reserve Bank of India (RBI) on 29 September 2016. 

Search and Selection Committee 

Section ZC of the Reserve Bank of India Act 1934 provides for a Search and Selection Committee to recommend the names of the persons to be appointed as members of the RBI's Monetary Policy Committee.

The committee consists of ;

• Cabinet Secretary who is also the Chairperson of the committee - TV Somanathan;
• Governor of the Reserve Bank of India or his representative (not below the rank of Deputy Governor);
• Secretary, Department of Economic Affairs- Ajay Seth
• Three experts, nominated by the central government who, are experts in economics /banking/ finance/ monetary policy.

Newly Appointed 3 Members of the Monetary Policy Committee

According to section ZB of the RBI Act 1934, the Monetary Policy Committee consists of six members and is headed by the Governor of the RBI.

Three members are from RBI, and the government of India appoints the remaining three members.

Members from RBI

• Governor of RBI, who is also the Chairman of the MPC- Dr Saktikanta Das
• Deputy Governor of the RBI in charge of the Monetary Policy- Dr Michael Patra 
• One Officer of the RBI nominated by the Central Board of the RBI-

Members appointed by the Government of India 

They are eminent economist, and the recently appointed members are as follows :

• Prof. Ram Singh, Director, Delhi School of Economics, Delhi University,
• Saugata Bhattacharya, 
• Dr. Nagesh Kumar, Director, Institute for Studies in Industrial Development, New Delhi. 

Term of the Members 

The term of the members appointed by the government is four years, and they are not eligible for re-appointment. The government can remove them from their office on certain grounds, and they can also resign from their office.

Functions of the Monetary Policy Committee 

• Under section 45ZA of the Reserve Bank of India Act, 1934, the Monetary Policy Committee determines the policy rates of the Reserve Bank of India (RBI) to achieve the inflation target set by the government of India. 
• The government of India, in consultation with the RBI, sets the inflation target in terms of the Consumer Price Index once every five years.