The Reserve Bank of India (RBI) has constituted an expert committee to review and strengthen its monetary policy framework. The committee headed by RBI deputy governor Urjit Patel and comprising seven other members will submit its report in the next three months.

“It has been decided to constitute an Expert Committee to examine the current monetary policy framework of the Reserve Bank of India and recommend what needs to be done to revise and strengthen it with a view to, inter alia, making it transparent and predictable,” the regulator said on Thursday. The announcement comes a week after the RBI governor Raghuram Rajan, in his inaugural speech, had spoken about strengthening the monetary policy framework emphasising on the need for transparency.

Apart from Patel, the other members include- RBI's executive director Deepak Mohanty, PJ Nayak, Chetan Ghate, associate professor (economics and planning unit) at the Indian Statistical Institute, Peter J. Montiel, economics professor at Williams College, Sajjid Z. Chinoy, chief economist and executive director at JP Morgan, Bank of Baroda's chief economist, Rupa Nitsure and Gangadhar Darbha, executive director at Nomura Securities.

While announcing a monetary policy, it is important to keep in mind how it would impact the economy which is operating in a globalised scenario and that external factors will affect the country. The committee has been asked to review the organisational structure, operating framework and instruments of monetary policy ..... with a view to ensuring compatibility with macroeconomic and financial stability, as well as market development,” the regulator said.

The committee will be taking into account the reports submitted by previous committees before making its own recommendations on improving transmission across financial market segments and to the economy as a whole.