Economics • Banking & FinanceMedium
What is the primary role of the 'Monetary Policy Committee (MPC)' established under the Reserve Bank of India Act, 1934?
A. To determine the policy interest rate required to achieve the inflation target set by the Central Government.✓ Correct Answer
B. To manage the physical printing and distribution of currency notes across currency chests.
C. To audit the financial statements of all public sector banks annually.
D. To fix the statutory minimum wages for unorganized sector workers.
💡 Solution & Explanation
The Monetary Policy Committee was established under the amended Reserve Bank of India Act, 1934, with the primary mandate to determine the policy interest rate required to achieve the inflation target set by the central government. Other choices incorrectly assign roles related to currency printing, bank auditing, or wage fixing to the committee. The statutory framework ensures institutionalized collective decision-making for price stability and growth.
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