List of govt nominees to MPC sent for final nod

The panel might be in place before the next RBI policy statement

The names of the government's nominees to the Monetary Policy Committee have been sent to the Appointments Committee of the Cabinet (ACC), raising the prospects that the panel might be in place before the next Reserve Bank policy statement, on October 4.

Announcement of the MPC members can happen as soon as the ACC approves it, said an official aware of the developments. "It can even be tomorrow if it is approved. It is with the ACC," a senior government official told Business Standard, and added that even the Prime Minister's Office was aware of the urgency of the matter.

The official also admitted that the appointment process had been a challenge due to conflict of interest. "Getting good people is a challenge due to conflict of interest. Most of them are directors in some company's board or the other."

The MPC has been tasked with deciding benchmark interest rates, hitherto a decision of the Reserve Bank of India (RBI) Governor. It will have six members. New RBI Governor Urjit Patel will head it. Three members - the governor, a deputy governor and an executive director - will be from RBI. The other three will be nominated by the government after looking at the recommendations of the search-cum-selection committee, headed by the Cabinet secretary. The search committee also comprises the economic affairs secretary and the RBI governor.

Each MPC member will have one vote, with the governor having an additional vote in case of a tie. Three members of the MPC will be experts in economics or banking or finance or monetary policy, will be appointed for four years and not be eligible for re-appointment. The meetings will be held at least four times a year and the panel will publicise its decisions after each such meeting.