India Names Members of New RBI Rate Panel Under Governor Patel

(Bloomberg) -- India’s government picked its candidates for the central bank’s new monetary policy committee, clearing the way for interest-rate decisions to be taken collectively for the first time as Governor Urjit Patel starts his term.

Prime Minister Narendra Modi’s administration named Chetan Ghate, a member of the Reserve Bank’s existing advisory panel, Pami Dua, head of the economics department at Delhi University, and Ravindra Dholakia, an economics professor at India’s top management school, the selection panel said in a statement on Thursday. Each will hold a four-year term and join Patel and two Reserve Bank officials on the six-member panel.

The decision is the last step in a drive started by Patel and his predecessor Raghuram Rajan to modernize the 81-year-old institution. Rajan had argued that the vote-based system, which aligns the Reserve Bank with peers such as the Bank of England, will help diffuse pressure that was until now focused on the governor. 

The committee will need to navigate between the government’s likely expectations of an interest-rate cut in the face of slower economic growth and key state elections, and an inflation rate that had briefly breached the central bank’s target this year. The next policy review is scheduled for Oct. 4.