Economics • Banking & FinanceMedium
Examine the structure of the 'Monetary Policy Committee (MPC)' in India. Which of the following statements regarding its composition and voting is correct?
A. It consists of six members, where the Governor of the Reserve Bank of India holds a casting vote in the event of a tie✓ Correct Answer
B. It consists of five members appointed entirely by the Union Ministry of Finance without legislative oversight
C. It is chaired by the Union Finance Minister with majority representation from commercial bank executives
D. Decisions are made by a simple majority vote of members present, and dissenting votes are kept confidential indefinitely
💡 Solution & Explanation
The MPC comprises six members including three from the RBI and three external members appointed by the central government, with the RBI Governor holding a casting vote in case of ties. The committee was established under the amended Reserve Bank of India Act, 1934, to ensure transparency and institutionalize price stability. Minutes of the MPC meetings are published publicly within fourteen days following the conclusion of each meeting.
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