What's New

Extension of RBI Deputy Governor term by one year

News: Indian Central Government has extended the term of Deputy Governor of Reserve Bank of India (RBI) Micheal Debabrata Patra by a period of one year with effect from January 15th, 2023. His three year tenure was coming to an end on 14th January.

• The extension of Deputy Governor was approved by the Appointments Committee of the Cabinet and this committee is headed by PM Narendra Modi
• Patra along with being the Deputy Governor of RBI is a member of the rate-setting committee and looks after the Monetary Policy of the nation.

Monetary Policy Committee (MPC)

• MPC is RBI’s government-constituted body whose primary task is to frame monetary policy using various financial tools like repo rate, bank rate, reverse repo rate, cash reserve ratio, MSF, Liquidity Adjustment Facility etc.
• MPC was constituted by the central government under Section 45ZB of the RBI Act which was amended in the year 1934

Composition of MPC

• This committee has six members out of which three members are nominated by the government and no government official can be nominated as an MPC member.
• The remaining three members are to be from the RBI itself and its governor acts as the ex-officio chairperson. The Deputy Governor of RBI who is in charge of the monetary policy will be a member of this committee.

Selection and tenure of members

• The MPC members are appointed for a period of 4 years and are not eligible for for reappointment at any cost
• The members who are nominated by the government to the MPC are selected by a Search-cum-Selection Committee which comes under the purview of Cabinet Secretary along with the Economics Affairs Secretary, RBI Governor and three experts in the field of economics/ banking/ finance as its core members.