No extension for RBI MPC members, DEA Bajaj-headed panel to explore new faces1 min read . Updated: 31 Jul 2020, 11:04 AM IST
- Three of the six-member MPC are external representatives and they are appointed by the government for a fixed term of four years
- The three members whose tenure is due to end 30 September are Ravindra Dholakia, Pami Dua and Chetan Ghate
NEW DELHI: The government has set up a panel headed by department of economic affairs secretary Tarun Bajaj to select four new members to Reserve Bank of India’s Monetary Policy Committee, two sources familiar with the development told Mint.
In the process, the government has declined the central bank’s request to extend till 31 March the tenure of three of its members whose term is due to end in two months from now. The MPC comprises six members, including the Governor (Shaktikanta Das).
Three of the six-member MPC are external representatives and they are appointed by the government for a fixed term of four years.
“The rules do not allow for reappointment and hence a search committee has been set up. It also includes Governor Das," one of the sources familiar with the development said. Bajaj also sits on RBI’s central board as a government nominee.
The three members whose tenure is due to end 30 September are Ravindra Dholakia, Pami Dua and Chetan Ghate. They are all external to RBI and were appointed by the government in 2016. Janak Raj, an executive director at the RBI and an MPC member, retired in June, and hence the search is for four new faces.
RBI deputy governor Michael Debabrata Patra is the sixth member of the interest rate-setting panel.
Mails sent to RBI and finance ministry spokespersons on the denial of RBI request and setting up of the Bajaj panel remained unanswered.
“The request was made in June keeping the covid situation in mind since the central bank is stretched for resources because of work from home. Hence, it would have been difficult to carry out the exercise including the interviews of candidates," the same source quoted above said.
The MPC is mandated to set its monetary policy in a manner that consumer prices stay between 2% and 6%.