New Member of Monetary Policy Committee (MPC)

The Reserve Bank of India’s (RBI) central board gave its approval to appoint Rajiv Ranjan as an ex-officio member of the RBI’s monetary policy committee.

Who is Rajiv Ranjan and he is replacing whom?

Mridul Saggar is being replaced by Rajiv Ranjan. Saggar retired at the end of April 2022. Ranjan has been working with the RBI for more than 33 years. Recently, he headed RBI’s “department of economic and policy research.” This department is in line with the research function and monetary policy of the central bank.

What do you mean by Monetary Policy?

It is the RBI’s policy regarding the use of monetary instruments that are under the control of the central bank. The monetary policy’s main goal is to maintain price stability in India while also considering the growth objective.

What is the function of the monetary policy committee?

The Monetary Policy Committee fixes the interest rate that is applicable in the country. This committee meets 4 times a year which is once every quarter. The MPC after every meeting publishes the decisions that have been taken by them.

How many members are there in the monetary policy committee?

The MPC has six members.  There are three officials who are from the RBI and there are three external members who are nominated by the central government. This committee’s chairperson is the Governor of the RBI.

Who are the members of the MPC?

  1. Chairperson- Shaktikanta Das
  2. Michael Debabrata Patra
  3. Rajiv Ranjan
  4. Ashima Goyal
  5. Shashank Bhide
  6. Jayanth Varma

Members 1 to 3 are officials from the RBI and members 4 to 6 are appointed by the central government.

When was the MPC formed?

The MPC was first proposed by the Urjit Patel Committee. The idea was to set up a five-member MPC with 3 from RBI and 2 appointed by the Indian government. The central government however proposed a seven-member MPC. After much negotiation, a six-member MPC was decided upon. RBI’s Monetary Policy Department (MPD) helps the MPC.  This committee came into existence on 27th June 2016.

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