RBI governor very happy with composition of MPC

In his Budget speech, Finance Minister Arun Jaitley had said the RBI Act will be amended to set up the committee consisting of six members and headed by RBI governor.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney
moneycontrol.com

Home » News » Economy

Mar 12, 2016, 06.23 PM | Source: PTI

RBI governor 'very happy' with composition of MPC

In his Budget speech, Finance Minister Arun Jaitley had said the RBI Act will be amended to set up the committee consisting of six members and headed by RBI governor.

Like this story, share it with millions of investors on M3

RBI governor very happy with composition of MPC

In his Budget speech, Finance Minister Arun Jaitley had said the RBI Act will be amended to set up the committee consisting of six members and headed by RBI governor.

Post Your Comments

Share Cancel

RBI governor very happy with composition of MPC
RBI Governor Raghuram Rajan today said he is "very happy" with the composition of the proposed six-member monetary policy committee that will set benchmark interest rates.

In his Budget speech, Finance Minister Arun Jaitley had said the RBI Act will be amended to set up the committee consisting of six members and headed by RBI governor.

Out of the six members, three will be nominated by the government while three others will be from the Reserve Bank, including the governor.

"We are very happy with the monetary policy committee composition. It was discussed at length with the government.

And it has been settled for some time... it's for the government to reveal the composition and it has done so in the Budget," Rajan said.

"I think it's a very reasonable step forward. The monetary process will benefit from this structure. So, I am absolutely on board and happy with it." He was speaking to reporters after Finance Minister Arun Jaitley addressed the RBI board meeting.

The committee will take decision based on the majority vote. Each member will have one vote, but RBI governor will get a casting vote in case of equality of votes. Currently, the RBI governor decides key interest rates.

To a question on recapitalisation of state-owned banks, Rajan said the amount provided in the Budget is a reasonable sum.

"Of course, the finance minister has added that what was needed was provided. Of course, in this process, we have to be careful that the capital is used properly going forward...," he said.

"You take the combination of capital that the government has made available and what RBI has made available. This will be adequate for the actions that we want to take. But of course, it's difficult to take everything into account." In the Budget speech, Jaitley had said the government was open to providing more capital than what was announced. The government plans to provide Rs 25,000 next fiscal and Rs 10,000 crore each in 2017-18 and 2018-19.

Jaitley had also proposed consolidation of public sectors banks in the Budget speech.

On mergers of banks, Rajan said certainly there is a rationale for consolidation of some of the banks, but it is a process which is being discussed as it does not "happen overnight".

He is hopeful of finding good candidates for the merger.

"Certainly, there is rationale for merging some of the banks.

We need as many banks for following a similar strategy as we have," the governor added.

"The whole sorts of partners are going to be involved, the Bank Board Bureau or maybe, a committee. We are taking into account all these things.

Buy, Hold, Sell ? Hear it first on M3
RBI governor very happy with composition of MPC

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login