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    RBI requests govt for extension of part time MPC members' tenure for policy continuity

    RBI requests govt for extension of part time MPC members' tenure for policy continuity

    RBI requests govt for extension of part time MPC members' tenure for policy continuity
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    By Sapna Das   IST (Published)

    The Reserve Bank of India is learned to have approached the government seeking an extension of tenure for its part time members in the Monetary Policy Committee, so as to maintain policy continuity amid the COVID crisis.
    Under the RBI Act, part time or external members of the MPC have a four-year term which cannot be extended. Pammi Dua, Chetan Ghate and Ravindra Dholakia’s terms are ending in September, prompting the regulator to seek an extension from the government.
    Since the outbreak of the pandemic, the MPC has met three times--on March 27, April 17 and May 22--to announce monetary stimulus and regulatory forbearance measures for stressed borrowers.
    Government sources told CNBCTV18 that there was a proposal from the RBI and that no call had been taken so far one way or the other.
    In case the government accedes to the RBI request and decides to continue with the present set of external members in the MPC beyond September, it may need to tweak the RBI law, creating a precedent for an extension of such members. The upcoming monsoon session of Parliament could provide that opportunity, provided the government decides to go down that path.
    Sources said the government has time till August to deliberate on RBI’s request.
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