The Reserve Bank of India’s principal adviser in the monetary policy department, Janak Raj, is likely to be the third internal member of the central bank in the monetary policy committee (MPC), which sets interest rates.
This is because the government has elevated Michael Patra, the executive director of the monetary policy department, as deputy governor. Mr. Patra was one of the RBI’s internal members of MPC, apart from Governor Shaktikanta Das and B.P. Kanungo, the Deputy Governor in charge of the monetary policy. The next meeting of the monetary policy committee is scheduled for early February.
According to the law, by default, the Governor and the Deputy Governor in-charge of monetary policy are the two RBI internal members of MPC. The law says that the third member could be any RBI officer. Mr. Patra, an economist, is likely to get the monetary policy department and would hence continue as an MPC member.
Mr. Kanungo was given the charge of the department after Viral Acharya, the deputy governor in charge of the monetary policy department, quit in at the end of July last.
The MPC consists of six members, of which three are RBI’s internal members and three are external experts.
Among the four deputy governors of RBI, two are promoted from within the ranks of RBI. Of the remaining two, one is a commercial banker and another, an economist.
Sources said Mr. Raj could be elevated to the executive director’s post, the interviews for which are due in February. At present, the Reserve Bank has 12 executive directors , some of whom will retire during the year.
