meri saheli magazine Published this article page no 26 Indian Economy and issues relating to planning mobilization of resources growth development and employment. 1. What is the RBIs MPC? Context Jayant Varma Member of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) who has been opposing the RBIs accommodative policy stance has said the stance carries with it the risk of falling behind the curve in future because the stance limits the MPCs freedom of action in ensuing meetings. What is an accommodative policy stance? An accommodative stance means the central bank is prepared to expand the money supply to boost economic growth. The central bank during an accommodative policy period is willing to cut the interest rates. About MPC The RBI has a governmentconstituted Monetary Policy Committee (MPC) which is tasked with framing monetary policy using tools like the repo rate reverse repo rate bank rate cash reserve ratio (CRR).c It has been instituted by the Central Government of India under Section 45ZB of the RBI Act that was amended in 1934. Functions The MPC is entrusted with the responsibility of deciding the different policy rates including MSF Repo Rate Reverse Repo Rate and Liquidity Adjustment Facility. Composition of MPC 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 exofficio chairperson. Deputy governor of RBI in charge of the monetary policy will be a member as also an executive director of the central bank. Selection and term of members Selection The government nominees to the MPC will be selected by a SearchcumSelection 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 meri saheli magazine buy.
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