<div>Governor Raghuram Rajan on Thursday (05 November) said the government and the central bank have agreed on composition of the interest rate-setting monetary policy committee (MPC).</div><div><br>“MPC agreement has been largely done. Only fine-tuning is left. The government and RBI are broadly on the same page on composition of MPC,” Rajan said.</div><div> </div><div>The government has proposed to set up MPC, which will consist of representatives from the Finance Ministry and RBI, to decide on interest rate.</div><div> </div><div>Rajan said the final call on the timing of implementing MPC will be taken by the Finance Ministry.</div><div> </div><div>The revised draft of the Indian Financial Code (IFC), released by the ministry in July, had suggested doing away with RBI Governor’s veto power and proposed a 7-member MPC to take rate decisions by a majority vote.</div><div> </div><div>Of the seven members, four are proposed to be government nominees and the rest from RBI.</div><div> </div><div>Under the current set-up, the government appoints RBI Governor, who controls the monetary policy and has veto power over the existing advisory committee of RBI members and outside appointees that sets rates.<br><br>(PTI)</div><div> </div>
