5-Oct-2018: Fourth Bi-monthly Monetary Policy Statement, 2018-19
The Monetary Policy Committee (MPC) in its fourth bi-monthly statement, issued on 05.10.2018, on the basis of an assessment of the current and evolving macroeconomic situation at its meeting, decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5 per cent.
The GDP growth projection for 2018-19 is retained at 7.4 per cent as in the August resolution. The projections of inflation for 2018-19 and Q1:2019-20 have been revised downwards from the August resolution.
The decision of the MPC is in consonance with the Government’s assessment of inflation and growth going forward and for achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent., while supporting growth.
The Government welcomes the MPC’s assessment and notes its decision to maintain the Policy Rate.
23-Jul-2017: MPC members to get Rs. 1.5 lakh per meet
The Reserve Bank of India (RBI) recently notified the Monetary Policy Committee and Monetary Policy Process Regulations, 2016.
Remuneration: Members of the Monetary Policy Committee (MPC) will be paid Rs. 1.5 lakh per meeting along with air travel and other reimbursements.
Silent period: Members will have to observe a “silent period” of seven days before and after the rate decision for “utmost confidentiality”. Members are also required to be mindful of any conflict between their personal and public interest while interacting with profit making organisations and making personal financial transactions.
Voting pattern: Each member of the MPC has one vote and in case the numbers are equal, the governor has the casting vote.
Report: The MPC, which has the responsibility of achieving a set inflation target, should submit a report to the government in case of failure to achieve the required target. In such instances, the report shall be sent to the central government “within one month from the date on which the bank has failed to meet the inflation target“.
Meetings: MPC has to hold meetings at least four times in a year. The schedule of the MPC meetings for the entire fiscal year needs to be announced in advance. At least 15 days of notice is required for convening a meeting ordinarily, but an emergency meeting can be called with 24 hours' notice for each member and technology-enabled arrangements need to be made for even shorter notice period meetings.
Assets declaration: All members need to disclose their assets and liabilities and update this information once every year.
After conclusion of MPC meeting, a resolution needs to be made public including on the policy repo rate and any other monetary policy measures at the discretion of the Chairperson while keeping in view the functioning and timing of financial markets.
The six-member MPC was constituted in September 2016. It has been deciding on policy rates since October last year. The committee will have six members. Of the six members, the government will nominate three. No government official will be nominated to the MPC. The other three members would be from the RBI with the governor being the ex-officio chairperson. Deputy governor of RBI in charge of the monetary policy will be a member, as also an executive director of the central bank.
Decisions will be taken by majority vote with each member having a vote. RBI governor’s role: The RBI Governor will chair the committee. The governor, however, will not enjoy a veto power to overrule the other panel members, but will have a casting vote in case of a tie. The government nominees to the MPC will be selected by a Search-cum-Selection Committee under Cabinet Secretary with RBI Governor and Economic Affairs Secretary and three experts in the field of economics or banking or finance or monetary policy as its members. Members of the MPC will be appointed for a period of four years and shall not be eligible for reappointment.