Which of the following bodies is legally mandated to constitute the 'Monetary Policy Committee (MPC)' under the Reserve Bank of India Act, 1934?

💡 Solution & Explanation

The Monetary Policy Committee is a statutory body constituted by the Central Government under Section 45ZB of the Reserve Bank of India Act, 1934, as amended by the Finance Act, 2016. It is entrusted with the responsibility of determining the policy interest rate required to achieve the inflation target. The committee comprises six members, including the Governor of the Reserve Bank of India as chairperson. This institutional mechanism brought greater transparency and institutional accountability to monetary policy formulation in India.