Mumbai: RBI Governor Raghuram Rajan, who unveiled his last monetary policy before exiting next month, today said a broadbased multi-member panel will decide on the interest rate at the next review on October 4.
Rajan, who demits office after completing his 3-year term on September 4, said that half of the six-member monetary policy committee (MPC) are already in place and the government will name its nominees shortly.
With the setting of MPC, the interest rate setting powers would move from RBI Governor to the panel.
"I think there is some likelihood that the next decision will be made by the MPC rather than an individual. If that is the case, there would be six people sitting together and deciding what the path of interest rates will be. I think, we should expect them to take an independent decision and I am sure they will," Rajan said.
Pressed further as to why he is so hopeful that the next policy would be by the MPC, Rajan said except the selection of three members that the government has to decide on everything is in place.
"The process has already started. It is not going to take a long long time to do that," he said at the customary post-policy press conference.
On the RBI's side, Rajan said, the Board has selected Michael Patra to be the RBI Board nominee on MPC. The other two members from the RBI will be the Governor and the Deputy Governor in charge of monetary policy.
"With the formation of the MPC, the Government and the RBI will have completed a fundamental institutional reform, which modernises India's monetary policy framework and builds a platform for strong and sustainable growth," Rajan said. (PTI)