RBI Monetary Policy Committee (MPC) is a 6-member body formed in 2016 to decide repo rates and control inflation while supporting growth. In Oct 2025, it kept repo rate at 5.5%, raised GDP forecast to 6.8%, and lowered inflation outlook to 2.6%. MPC ensures price stability, transparency, and balanced economic growth.

RBI Monetary Policy Committee: The Reserve Bank of India Monetary Policy Committee (often just called the RBI MPC) is very important for India’s economy. It helps in making decisions about interest rates and inflation control. The main aim of the committee is to keep prices stable and support economic growth. This body was created to make sure that decisions about money and credit are taken in a structured and transparent way.

In recent years, the Reserve Bank of India Monetary Policy Committee has become central to how the Indian economy is managed. It makes decisions that affect banks, businesses, and common people. For example, the lending rate of banks depends on the repo rate decided by the committee. This affects loans, EMIs, and even the savings of people.

The latest RBI MPC meeting 2025 shows how important this committee is in responding to global risks like tariffs and domestic challenges like inflation. To understand it better, below, we’ve mentioned its highlights, structure, objectives, functions, and powers.

RBI Monetary Policy Committee Meeting 2025 Highlights

The RBI MPC meeting 2025 was held in October. The committee decided to keep the repo rate unchanged at 5.5%. This was done because inflation is low, but growth faces risks due to tariffs from other countries.

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Some key highlights include:

What is RBI Monetary Policy Committee?

RBI Monetary Policy Committee is a group of six members formed under the Reserve Bank of India Act, 1934. Its task is to set the policy interest rate, known as the repo rate. The repo rate is the rate at which the RBI lends money to commercial banks.

The main goal of this committee is to keep inflation under control while supporting economic growth. Earlier, the RBI Governor used to take such decisions. But to make the process more transparent and balanced, the committee was formed in 2016.

RBI MPC Full Form

RBI MPC full form is Reserve Bank of India Monetary Policy Committee. This is a statutory body created by law. Every word in the full form has a clear meaning:

• Reserve Bank of India: India’s central bank.
• Monetary Policy: Refers to the control of money supply and interest rates.
• Committee: A group of members making collective decisions.

RBI Monetary Policy Committee Members

Monetary Policy Committee (MPC) of the Reserve Bank of India is constituted under the RBI Act, 1934. It includes three members from the RBI and three members nominated by the Central Government. The Governor of RBI serves as the Chairperson.

The three members nominated by the Central Government hold office for four years or until further notice.

RBI Monetary Policy Committee Chairman

Monetary Policy Committee chairman is always the Governor of the Reserve Bank of India. At present, the chairperson is Sanjay Malhotra. The chairman leads the discussions and has a casting vote in case of a tie. This means if votes are equal, the chairman’s vote decides the final outcome.

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RBI Monetary Policy Committee Vs RBI Monetary Policy

Many people get confused about the RBI Monetary Policy Committee (MPC) with the RBI Monetary Policy, but they are different. The MPC is the team that makes decisions, but on the other hand, the Monetary Policy is the set of actions that are taken based on those decisions. 

Objective of RBI Monetary Policy Committee

The main goal of the RBI Monetary Policy Committee (MPC) is to keep India’s economy stable and growing. Below, we’ve mentioned the objective of RBI Monetary Policy Committee:

Keep Prices Stable: The MPC works to stop prices from rising too fast. This makes it easier for people and businesses to plan their spending.

Help the Economy Grow: While keeping prices stable, the committee also makes sure the economy grows. This helps businesses, creates jobs, and encourages investment.

Make Clear Decisions: The MPC makes decisions that are clear and based on facts. This helps people trust the economy and the markets.

Build Confidence: By making steady and predictable decisions, the MPC helps investors, businesses, and citizens feel confident about the economy.

Balance Prices and Growth: The committee makes sure prices don’t rise too fast and that the economy keeps growing steadily.

RBI Monetary Policy Committee Functions and Powers

RBI Monetary Policy Committee (MPC) has clear roles and powers to manage the economy. Below, we’ve mentioned the functions and powers of the RBI MPC:

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Instruments used by the RBI MPC

RBI Monetary Policy Committee (MPC) uses many instruments to control inflation, manage liquidity, and support economic growth. 

RBI Monetary Policy Committee (MPC) is important for maintaining India’s economic stability. By setting the interest rates and monitoring inflation, it balances the price stability with sustainable growth. Its transparent, data-driven decisions impact banks, businesses, and households, making sure that confidence in the economy is maintained even amid domestic and global challenges.

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