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In a bid to present itself as an autonomous body, the Reserve Bank of India on Wednesday disclosed that the six-member Monetary Policy Committee had unanimously declined a meeting with Finance Ministry officials ahead of the policy review.
“The meeting did not take place. All the MPC members declined the request of the Finance Ministry for that meeting,” Patel said, when asked about reports of such a meeting and if it compromises the autonomy of the RBI.
While the Centre has been airing its views on its expectations from the credit policy in the past, it was reported that the Finance Ministry had summoned the members of the MPC to New Delhi to discuss the government’s views on interest rate policy.
A high-ranking Finance Ministry official had told a media house that such meetings would give structure to the government inputs to the MPC.
Though the RBI and the Centre have been at different ends of the spectrum on many occasions, of late questions have been raised on the autonomy of the central bank, especially after the demonetisation exercise.
“The MPC’s decision to not meet the Finance Ministry officials maybe to re-emphasise its autonomy,” said a former banking official.
5:1 Dissent for first timeMeanwhile, there was difference of opinion within the MPC for the first since it started meeting in October.
The vote by the central bank’s MPC was 5:1. Of the six members, one external member Ravindra Dholakia, Professor at Indian Institute of Management, Ahmedabad, was not in favour of a pause in policy rate.
The RBI’s MPC has three internal members — Governor Urjit Patel, Deputy Governor Viral Acharya, and Michael Patra, the Executive Director in charge of monetary policy.
The external members are Chetan Ghate, Professor at Indian Statistical Institute; Pami Dua, Director at Delhi School of Economics, and Ravindra Dholakia.
At the previous policy meeting Patra had initially taken a view against holding the repo rate but then he eventually decided to vote along with the other five, in favour of holding the rate.
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