Monetary Policy Committee скачать в хорошем качестве

Monetary Policy Committee

Before 2016, the Governor of RBI was the one responsible for Monetary Policy. He was the one who decided policy rates- Repo rates etc. In May 2014, Shri Narendra Modi took over as the Prime Minister of India. Two years after this, The Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a statutory and institutionalised framework for a Monetary Policy Committee (MPC) The MPC came into existence on 27 June 2016 Section 45ZB of The RBI Act 1934 states the details of how a MPC will be constituted. Instead of a single person (RBI Governor), committee-based approach for determining the Monetary Policy added lot of value and transparency to monetary policy decisions. What are the Objectives of MPC— ---Maintaining price stability while keeping in mind the objective of growth This is done by regulating the supply of money in the economy ---Deciding policy interest rates required to achieve the inflation target. And what is the inflation Target ?? The Government, in consultation with RBI has decided a target for inflation… Inflation Target: Four per cent. Upper tolerance level: Six per cent. Lower tolerance level: Two per cent. This means RBI will aim at keeping Inflation between 2 and 6% This target is for inflation measured by Consumer Price Index MPC has six members Three members are from the RBI (including the RBI Governor as the Chairman of MPC) The other three Members of MPC are appointed by the Central Government. (These three members from outside RBI hold office for four years) Each member of MPC has one vote. Decisions are voted- For and Against. ...Majority decides the policy What happens if three members are FOR a decision and three are AGAINST a decision...... This would create a stalemate !!! In such situations, the RBI Governor has a second vote (also called ‘Casting Vote’) The meetings of the Monetary Policy Committee have to be held at least 4 times a year #generalknowledge #generalawareness #currentaffairs