Examine the composition of the Monetary Policy Committee (MPC) established under the Reserve Bank of India Act, 1934. How many total members constitute this apex rate-setting body?

💡 Solution & Explanation

The Monetary Policy Committee comprises six members: three officials from the Reserve Bank of India, including the Governor who serves as chairperson, and three external members appointed by the Central Government. Established following amendments to the Reserve Bank of India Act, 1934 in 2016, the committee is tasked with determining the policy interest rate required to achieve the inflation target. Each member has one vote, and in the event of a tie, the RBI Governor exercises a casting vote. Decisions of the committee are published following bi-monthly reviews. A related statutory mandate is the inflation-targeting framework, which sets consumer price index inflation targets for the central bank.