New Delhi: The process to form the proposed Monetary Policy Committee for the Reserve Bank of India (RBI) will be initiated after the notification of the Finance Bill as an act, an official said on Tuesday.

“Process to constitute Monetary Policy Committee will be initiated after passage of Finance Bill and its notification as an Act,” Economic Affairs Secretary Shaktikanta Das said in a tweet.

At the sidelines of an event earlier in the day, Das said that the members from Reserve Bank “are known… that is already mentioned in the act itself. You have RBI governor, deputy governor and executive director. Now from the government side three independent members are to be nominated”.

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As per the amendments to the RBI Act through the Finance Bill passed in the Lok Sabha, the committee will have six members, with three appointed by the RBI and three government appointees nominated by an external selection committee. The RBI governor will have the casting vote in case of a tie.

From the RBI, the committee will consist of the governor, the deputy governor in charge of monetary policy and one official nominated by the central bank.

The members of the MPC appointed by a search committee will hold office for a period of four years and would not be eligible for re-appointment.

Under the current system, the RBI governor has the veto over the existing advisory committee, composed of RBI members and outside appointees, that decides on policy rates. The governor consults a Technical Advisory Committee, but does not necessarily go by the majority opinion while deciding on the monetary policy.

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