Monetary Policy Committee (MPC) is a 6 member committee formed after the amendment in the RBI Act, 1934 through the Finance Act, 2016. The first meeting of the Monetary Policy Committee (MPC) was held in Mumbai on October 3, 2016.
The Reserve Bank’s Monetary Policy Department (MPD) assists the Monetary Policy Committee (MPC) in forming the monetary policy.
Monetary policy refers to the policy of the RBI with regard to the use of monetary instruments to achieve the goals of GDP growth and lower inflation rate.
The basic objective of MPC is to maintain price stability and accelerate the growth rate of the economy.
The Monetary Policy Committee of RBI, has the following composition, namely:
- The Governor of the Bank - Chairperson, ex officio;
- Deputy Governor of the Bank, in charge of Monetary Policy - Member, ex officio;
- One officer of the Bank to be nominated by the Central Board - Member, ex officio;
- 3 other members to be appointed by the Central Government.
The Members of the Monetary Policy Committee appointed by the Central Government shall hold office for a period of four years.
