Which of the following statements is correct about the Chairperson of the Monetary Policy Committee of India, which was reconstituted by the Government of India in October 2024?

Correct option is D

The correct option is: (d) The RBI Governor is the Chairperson (ex officio) of the Monetary Policy Committee

• The Monetary Policy Committee (MPC) is a six-member body responsible for setting India's benchmark interest rate and maintaining price stability.

• As per the provisions of the Reserve Bank of India Act, 1934 (amended in 2016), the Governor of the RBI acts as the ex-officio Chairperson of the committee.

• The committee is reconstituted periodically, but the Chairperson remains the RBI Governor by default, irrespective of the year or government changes.

• Composition: 3 members from RBI (including Governor) + 3 external members appointed by the Government of India.

• RBI Governor Role: Ex-officio Chairperson with a casting vote in case of a tie.

• Other RBI Members: Deputy Governor in charge of monetary policy and one RBI officer nominated by the Central Board.

• Established Under: Section 45ZB of the RBI Act, 1934.

• Objective: Maintain inflation target (currently 4% ± 2%) and ensure economic growth.

Additional Information:

• Public Sector Bank Directors: Have no role in electing the MPC Chairperson.

• Prime Minister: Has no role in chairing or directly influencing MPC decisions.

• CAG of India: Deals with auditing and public accounts, not monetary policy decisions.