RBI seeks extension for MPC members

The Reserve Bank of India (RBI) is seeking extension of the tenure of external members on its rate-setting panel until March due to the Covid-19 pandemic, government officials with knowledge of the matter said.

The central bank has written to the finance ministry and the letter is under consideration, the officials said, asking not to be identified as the matter is not public.

Three of the six-member Monetary Policy Committee (MPC) are external representatives and their appointment is for a term of four years and they are ineligible for reappointment, according to rules.

The term of academics Chetan Ghate, Pami Dua and Ravindra Dholakia—the external members appointed to the Monetary

Policy Committee in 2016 with a mandate to target consumer prices within a range of 2%-6%—is due to end in September.

RBI governor Shaktikanta Das, his deputy Michael Patra and executive director Janak Raj are the others who make up the panel.

Spokesmen for the finance ministry as well as that of the central bank were not immediately available for a comment.

The MPC has cut the benchmark repo rate by 115 basis points (bps) so far this year to revive growth in an economy headed toward its first recession in more than four decades. Inflation, based on consumer prices, is above the mediumterm target of 4%, but the central bank expects it to ease in the coming months, allowing it follow an accommodative policy stance.