Monetary Policy Committee (MPC) of RBI

Under Section 45ZB of the amended (in 2016) RBI Act, 1934, the central government is empowered to constitute a six-member Monetary Policy Committee (MPC).

Objective: Further, Section 45ZB lays down that “the Monetary Policy Committee shall determine the Policy Rate required to achieve the inflation target”. The decision of the Monetary Policy Committee shall be binding on the Bank.

Composition: Section 45ZB says the MPC shall consist of 6 members:

  • RBI Governor as its ex officio chairperson
  • Deputy Governor in charge of monetary policy
  • An officer of the Bank to be nominated by the Central Board
  • Three persons to be appointed by the central government. This ....
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