MPC is headed by RBI governor, is a six-member panel, of which three members are from RBI and three are independent members selected by government. The independent members are experts in the field of economics, banking or finance.
The governor, however, will not enjoy a veto power to overrule the other panel members, but will have a casting vote in case of a tie. No government official will be nominated to the MPC.
MPC is expected to bring “value and transparency” to rate-setting decisions.
The MPC will meet four times a year to decide on monetary policy by a majority vote.
The committee was formed on the recommendation of Urjit Patel Committee, 2014.
MPC was constituted on many-heads-are-better-than-one approach and is expected to ensure that the decisions are not influenced by bias or lobbying.