Mumbai: The Reserve Bank of India (RBI) postponed Monday the meeting of the Monetary Policy Committee (MPC). The MPC is the all-important interest rate-setting panel. The RBI was forced to postpone the meeting over a possible lack of quorum. This is because the appointment of independent members is delayed.
The RBI in a press release said that the MPC meeting, which was to begin for three days beginning Tuesday for a bi-monthly monetary policy review, has been rescheduled. The new dates will be announced shortly.
“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,” the RBI said.
The government moved the interest rate-setting role from the RBI Governor to a six-member MPC in 2016. Half of the panel, headed by the RBI governor, is made up of external independent members. The four-year terms of three external members of MPC ended last month and they are yet to be replaced by the government.
Rules require at last four members to be present at the meeting, with at least one being the Governor or his deputy, who is a member of the committee. was expected that the MPC would hold interest rates at the upcoming meeting as inflation was still above the comfort zone.
The government in 2016 appointed Chetan Ghate, a professor at ISI; Pami Dua, director at Delhi School of Economics (DSE) and Ravindra Dholakia, professor at IIM, Ahmedabad, as independent members of the MPC for four years.
The other ex-officio members of the MPC are Reserve Bank Governor, Deputy Governor (in-charge of monetary policy) and one RBI officer to be appointed by the central board.
The MPC, which must have a quorum of four, cannot meet unless the central government appoints new independent members.
The government earlier this year constituted a search panel headed by the Cabinet Secretary with RBI Governor and Economic Affairs Secretary as members for selecting members of MPC.
