In order to revise and strengthen the monetary policy framework, the Reserve Bank of India (RBI) has constituted a nine-member panel to be headed by Deputy Governor Urijit Patel. The panel will examine RBI’s monetary policy framework and recommend upon the decision to be taken with a view to making it transparent and predictable.
This decision of forming this committee had been taken by RBI’s new governor Raghuram Rajan, who in his maiden speech as RBI governor announced that such a committee would be set up under deputy governor Urjit Patel.
The committee comprises of former country head of Morgan Stanley P J Nayak, Chetan Ghate of Indian Statistical Institute, Peter Montiel from Williams College in USA, Sajjid Chinoy from J P Morgan, Rupa Nitsure of Bank of Baroda, Gangadhar Darba of Nomura Securities and RBI executive director Deepak Mohanty.
The terms of reference for this committee includes review of the objectives and conduct of monetary policy in a globalised environment and to recommend an anchor for the conduct of policy. Further, amidst the debate over transmission, the committee will also identify regulatory, fiscal and other impediments to monetary policy transmission, besides recommending measures and institutional pre-conditions to improve transmission. It will also review the organisational structure, operating framework and instruments of monetary policy, particularly the multiple indicator approach and the liquidity management framework. Furthermore, committee is expected to submit its report in three months.