Monetary Policy Committee: six members, the RBI Governor as ex officio Chairperson, constituted under section 45ZB
Background
The Monetary Policy Committee has six members: three from the Reserve Bank and three appointed by the Central Government.
The Governor of the Bank is Chairperson, ex officio.
The Deputy Governor in charge of Monetary Policy is a Member, ex officio, and one officer of the Bank is nominated by the Central Board.
Members appointed by the Central Government hold office for a period of four years.
Its authority derives from section 45ZB of the Reserve Bank of India Act, 1934.
The inflation target band is 2-6 percent, with a 4 percent midpoint.
Members:
Six
Chairperson:
Governor of the Bank, ex officio
Government-appointed members' term:
Four years
Statutory basis:
Section 45ZB, RBI Act, 1934
Inflation target band:
2-6 percent, 4 percent midpoint
Why it matters for exams: The committee's size, its Chairperson and the 2-6 band are standard economy questions.
Kerala PSCUPSC
In plain words
Repo rate Rate at which RBI lends — The policy rate the committee sets.