The proposed monetary policy committee is likely to be in place before the Reserve Bank of India’s next bi-monthly policy statement in August. The selection of the government’s nominees for the committee is in advanced stages, a senior finance ministry official said.
“The selection process is in advance stages. It can be announced in July, as there are no roadblocks or hurdles left. Candidates are almost short-listed, their terms and conditions of services are decided. We are taking their consensus now. So, one can expect that the next policy will rather be decided by the committee,” the official said.
The government in the Finance Bill for 2016 had announced composition of the monetary policy committee. The committee will comprise of six members, three of whom will be nominated by the central government, while the other three will be the RBI governor, the deputy governor in-charge of monetary policy, and one officer of the central bank nominated by its central board.
The RBI governor will chair the committee with each member having one vote, with the RBI governor having a casting vote.
The three government-nominated members will be appointed by the central government through a search committee.
On the issue of upcoming redemption under the Foreign Currency Non-Resident Bank Deposit scheme, the official said that the government is ready for the redemption but is also exploring the option of rolling over the redemptions through issuance of bonds.
“We are ready to redeem it. We have adequate reserves. But we can also issue bonds to extend it if investors want,” the official said.
Soon after Raghuram Rajan took over as RBI Governor in September 2013, one of the first announcements he made was a special concessional dollar swap window to attract FCNR deposits and foreign currency borrowings.