The Reserve Bank of India has set up an expert committee to examine the current monetary policy framework of RBI and recommend what needs to be done to revise and strengthen it with a view to making it more transparent and predictable. The committee intends to review the objectives and conduct of monetary policy in a globalised environment. It will also look at the operating framework and instruments of monetary policy, particularly the multiple indicator approach and the liquidity management framework, said RBI in a press release. The review would be conducted to ensure compatibility with macroeconomic and financial stability as well as market development, RBI added. The committee will also identify regulatory, fiscal and other impediments to monetary policy transmission across financial market segments and to the broader economy.
The committee will be headed by deputy governor Urjit Patel. Members will include PJ Nayak, Chetan Ghate of the Indian Statistical Institute, Peter J Montiel of Williams College (USA), Sajjid Chinoy of JPMorgan and Rupa Nitsure of Bank of Baroda. The committee will submit it's report in three months. RBI governor Raghuram Rajan after taking charge had announced to review the monetary policy framework in order to make it more effective.