CG appoints three external members to RBI’s Monetary Policy Committee

The Government of India has appointed three economists- Ashima Goyal, professor, Indira Gandhi Institute of Development Research, Jayanth R. Varma, professor, Indian Institute of Management (IIM), Ahmedabad and Shashanka Bhide, senior advisor, National Council of Applied Economic Research (NCAER’s), as the new external members of the Reserve Bank of India (RBI) Monetary Policy Committee (MPC), after the four-year tenure of the earlier nominees ended in September.

The Appointments Committee of the Cabinet (ACC), headed by the prime minister, approved the names of the newly appointed members of the RBI Monetary Policy Committee.

The newly elected members of MPC will be replacing Chetan Ghate, Pami Dua, and Ravindra Dholakia, who were appointed on the MPC panel for four years from the date 29th September 2016. Their tenure had expired after the previous policy meeting on 6th August 2020.

The RBI had to postpone its last meeting of Monetary Policy Committee (MPC) beginning 29 September as the government could not fill the vacancies after the tenure of the three external members-Ravindra Dholakia, Pami Dua and Chetan Ghate-ended in September. Members of the MPC are not eligible for re-appointment.

So the Reserve Bank of India (RBI) had said in a statement on 28 September that “The meeting of the Monetary Policy Committee (MPC) during September 29, 30 and October 1, 2020, is being rescheduled. The dates of the MPC’s meeting will be announced shortly.”

Reserve Bank of India (RBI) on Tuesday this week released another statement in which it announced the new dates for the meeting of the monetary policy committee from October 7 to October 9, 2020.

The MPC is a statutory committee that fixes the key policy interest rates and monetary policy stance of the country as well as the inflation target. The MPC comprises three external members and three members from the RBI. The RBI Governor heads the MPC, with the Deputy Governor in charge of the Monetary Policy Department, and the Executive Director looking after the policy as the other members from the central bank.

According to the RBI Act, the external members can hold office for a period of four years and are not eligible for re-appointment. The external members of the MPC are appointed by the central government from amongst persons of ability, integrity and standing, having knowledge and experience in the field of economics, banking, finance or monetary policy.

With Warm Regards,

CL Bureau.