The panel will meet four times a year and publicise its decisions

The Centre brought the Monetary Policy Committee (MPC) one step closer to reality on Monday by notifying the changes made to the Reserve Bank of India (RBI) Act.

“The government has decided to bring the provisions of amended RBI Act regarding constitution of MPC into force on June 27, 2016 so that statutory basis of MPC is made effective,” according to a finance ministry statement. “The rules governing the procedure for selection of members of Monetary Policy Committee and terms and conditions of their appointment and factors constituting failure to meet inflation target under the MPC framework have also been notified on June 27, 2016.”

Economic Affairs Secretary Shaktikanta Das tweeted: “Amendments to RBI Act for Monetary Policy Committee (MPC) and connected rules notified. One step closer to its formation and operationalisation”.

The six-member Committee — tasked with bringing “value and transparency to monetary policy decisions” — will comprise three members from RBI, including the Governor, who will be the ex-officio chairperson, a Deputy Governor and one officer of the central bank.

Composition

The other three members will be appointed by the Centre on the recommendations of a search-cum-selection committee to be headed by the Cabinet Secretary.

“These three members of MPC will be experts in the field of economics or banking or finance or monetary policy and will be appointed for a period of four years and shall not be eligible for re-appointment,” according to the statement.

The Committee is to meet four times a year and make public its decisions following each meeting.