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    Question

    Which of the following statements is/are correct about

    Monetary Policy Committee?                                  i.            There are six members in the committee                                ii.            Three Members are from the RBI                               iii.              Other three Members of MPC are appointed by the Central Government                              iv.            Governor of RBI is the ex-officio chairman of the committee                                v.            Finance Minister of India has the Veto in case of need
    A All except III Correct Answer Incorrect Answer
    B All except II Correct Answer Incorrect Answer
    C All except I Correct Answer Incorrect Answer
    D All are correct Correct Answer Incorrect Answer
    E All except V Correct Answer Incorrect Answer

    Solution

    Composition of MPC          I.            MPC will be a 6 member committee: ·          3 members will be from RBI. These 3 members would include the governor who will also be the ex-officio chairperson of the committee. ·         3 members will be appointed by the central govt. These members should be experts in the field of finance or banking or economics or monetary policy. They will have tenure of 4 years and will not be eligible for reappointment. ·         The members appointed by the govt. will be appointed based on the recommendations by the search-cum-selection committee which will be headed by the cabinet secretary.        II.            Decisions will be taken by majority vote with each member having a vote      III.            The governor will not enjoy a veto power to overrule the other panel members, but will have a casting vote in case of a tie.     IV.            No government official will be nominated to the MPC MPC meets on a bi-monthly basis now. The quorum for the meeting of the MPC is four members.  

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