New RBI MPC external members likely to be announced tomorrow, sources say

In an exclusive development, sources have informed CNBC-TV18 that the names of three new external members of the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) are likely to be announced tomorrow.

The appointments will replace Ashima Goyal, J R Varma, and Shashanka Bhide, whose four-year terms end on October 6, 2024.

Goyal, an economist and professor at the Indira Gandhi Institute of Development Research (IGIDR), Bhide, a senior advisor at the National Council of Applied Economic Research (NCAER), and Varma, a professor of finance at the Indian Institute of Management, Ahmedabad (IIM-A), were appointed in October 2020.

As per the RBI Act, external members are not eligible for re-appointment, and their tenures cannot be extended.

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A government-constituted committee of external experts submitted the recommended names a few weeks ago, with the final approval resting with the Appointments Committee of the Cabinet.

A selection panel comprising RBI Governor Shaktikanta Das, Cabinet Secretary T.V. Somanathan, and Economic Affairs Secretary Ajay Seth is responsible for deciding the external members of the MPC. The final approval for the selected candidates rests with Prime Minister Narendra Modi.

The next MPC meeting is scheduled for October 7-9, 2024, requiring a quorum of four members.

In a similar scenario in 2020, the RBI had to delay its MPC meeting due to the late appointment of external members. The current MPC consists of six members: three internal RBI members, including Governor Shaktikanta Das, and three external members appointed by the government.