Which of the following statements is/are correct regarding the 'Monetary Policy Committee (MPC)?
- 1.It decides the RBI's benchmark interest rates.
- 2.It is a 12-member body including the Governor of RBI and is reconstituted every year.
- 3.It functions under the chairmanship of the Union Finance Minister.
Select the correct answer using the code given below:
- A.1 only
- B.1 and 2 only
- C.3 only
- D.2 and 3 only
▶ Answer & Explanation
Correct answer: A. 1 only
The Monetary Policy Committee (MPC) is mandated to determine the benchmark interest rate (policy repo rate) required to maintain inflation within the specified target level. The committee comprises six members: the Governor of the Reserve Bank of India (who is the ex-officio Chairperson), the Deputy Governor of RBI, one other officer of the RBI, and three eminent persons nominated by the Central Government. The decisions are taken by majority vote, with the Governor having a casting vote in case of an equality of votes. The term of the nominated members is four years.
Source: UPSC gs1 2017