Why in News?
The RBI’s Monetary Policy Committee maintained the repo rate at 5.5%, citing inflation control and economic resilience. Despite global uncertainties, GDP growth for 2025-26 was retained at 6.5%, while CPI inflation is projected at 3.1%, indicating balanced risks.
Description:
| Feature | Details |
| Type | Statutory Body |
| Legal Backing | Section 45ZB of RBI Act, 1934 (Amended by Finance Act, 2016) |
| Purpose | Inflation targeting via benchmark policy (repo) rate |
| Replaced | Technical Advisory Committee |
| Total Members | 6 |
| Members from RBI | RBI Governor (Chair), Deputy Governor, 1 RBI Board nominee |
| Members from Government | 3 external members nominated by Central Government |
| Tenure of External Members | 4 years |
| Voting System | Majority vote; Governor has casting vote in case of tie |
| Quorum | Minimum 4 members (must include Governor or Deputy Governor) |
| Decision Binding On | RBI |
| Support Department | RBI’s Monetary Policy Department (MPD) |
- MPC is part of India’s inflation-targeting framework agreed between RBI and Government.
- It meets at least four times a year.
- Decisions are made public with each member’s vote and reasoning.
- Enhances accountability and transparency in monetary policymaking.
- External members cannot be re-appointed.
- The Inflation Target is set by the Central Government in consultation with RBI (currently 4% ±2%).
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