The Reserve Bank of India (RBI) has postponed the announcement of its monetary policy scheduled for October 1.
The tenures of the three external members of the RBI’s Monetary Policy Committee (MPC) will end on September 30. The MPC, which must have a quorum of four, cannot meet unless the central government appoints new independent members.
This is the first time that the bimonthly policy announcement has been deferred since the establishment of the MPC in 2016 through the RBI Act.
The three external members appointed by the government — Chetan Ghate, a professor at Indian Statistical Institute; Pami Dua, director at Delhi School of Economics; and Ravindra Dholakia, professor at Indian Institute of Management, Ahmedabad — are not eligible for reappointment.
The rest of the members of the MPC come from the RBI and include Governor Shaktikanta Das, Deputy Governor Dr. Michael D. Patra and Executive Director Dr. Mridul K. Saggar.
According to analysts, the new external members should have been named by the government well before the deadline.
Without specifying any reason, the RBI said in a statement, “The meeting of the Monetary Policy Committee (MPC) during September 29, 30 and October 1, 2020... as announced vide a press release dated April 20, 2020 is being rescheduled. The dates of the MPC will be announced shortly.”
The MPC is scheduled for a review in 2021 when it completes five years.
Earlier this year, the government had constituted a search panel headed by the Cabinet Secretary, with the RBI Governor and the Economic Affairs Secretary as members, for selecting members of MPC.
The panel to select external members was set up earlier this year. It is headed by Cabinet Secretary Rajiv Gauba, and includes RBI Governor Shaktikanta Das or a deputy governor representing him, NITI Aayog vice-chairman Rajiv Kumar and Economic Affairs Secretary Tarun Bajaj.
(With PTI inputs)