New Delhi: Ahead of the first interest rate review since he took over as RBI Governor, Urjit Patel today met Finance Minister Arun Jaitley. Although Patel did not offer any comment on his meeting, it is deemed to be customary pre-monetary policy meeting with the Finance Minister. The next bi-monthly monetary policy of RBI is scheduled on October 4.
Patel replaced Raghuram Rajan as the head of central bank on September 4.
The meeting comes against the backdrop of government nominating its members to the all-powerful Monetary Policy Committee (MPC) that is to take over the interest rate setting job from the RBI Governor.
It is, however, not clear if the MPC will make India's first collective interest-rate decision on October 4 due to pending vigilance clearance to government-nominated three independent economists.
The government had last week named three academics to join RBI Governor Urjit Patel, his deputy in charge of monetary policy and another central bank executive on the new monetary policy committee (MPC).
Indian Statistical Institute Professor Chetan Ghate, Delhi School of Economics Director Pami Dua and IIM-Ahmedabad Professor Ravindra Dholakia did not have vigilance nod when the Appointments Committee of the Cabinet (ACC) made the appointments.
A post-facto clearance of the Intelligence Bureau (IB) as well as the Central Vigilance Commission (CVC) is being taken, a source said.
If the clearance doesn't come, Patel will decide on the interest rate. Otherwise the MPC will do the job. This will be the first monetary policy review after appointment of Patel as head of the 81-year-old central bank earlier this month.
There are expectations that Patel will cut interest rate on easing inflation. The Reserve Bank has reduced interest rate by 150 basis points since January 2015 with an aim to boost economic growth.
