Cabinet secretary-led panel to pick MPC members holds first meeting

New Delhi: The selection panel to appoint three government nominees for the monetary policy committee (MPC) held its first meeting recently to consider the candidates, a top Finance Ministry official said today.

"The committee had its first meeting recently. Let's see if they can suggest a name before October 4 policy," the official said.

Once formed, the 6-member MPC will decide on interest rates based on the inflation target under the monetary policy framework agreement.

The three government nominees will be short-listed by the search-cum-selection committee headed by the cabinet secretary. The other three members are RBI governor, deputy governor in-charge of monetary policy and an RBI executive director.

The governor will have a casting vote once the country shifts to the panel system for setting rates. With Urjit Patel being elevated as the RBI chief, the post of RBI deputy governor in charge of monetary policy has fallen vacant.

MPC will set interest rates based on inflation target of 4 per cent within an upper and lower tolerance band of 2 per cent. The next bi-monthly policy review of RBI is scheduled for October 4.