In response to a Right to Information (RTI) request, the Reserve Bank of India (RBI) stated that it had no records of what happened at the critical monetary policy committee meeting on November 3 that addressed its failure to attain the inflation target.
The central public information officer (CPIO) of RBI stated in a response to Mint’s RTI request on January 25 that the “information sought is not available.” “. The executive director Radha Shyam Ratho then stated on March 17 in response to an appeal about the same issue that “no minutes are available in respect of the MPC meeting held on November 3, 2022.”
“The appellate authority, at the appellate stage, cannot direct the CPIO to procure or develop the information sought and submit to the appellant where the information sought is not available in the records available with the CPIO,” stated Ratho.
The inability of the RBI to fulfil its obligation to keep inflation within the flexible target range of 2-6% for nine straight months between January and September of last year was what sparked the meeting in November.
The central bank is required to explain its failure to the government, provide corrective measures, and give an estimate of the time range in which it will reach the target under the inflation targeting framework of the RBI Act.
In a press release on November 3, the RBI stated that the MPC had met earlier that day to discuss and draught the report that would be sent to the government in accordance with Section 45ZN of the RBI Act. All MPC members were present for the meeting, which was presided over by governor Shaktikanta Das.
The regulator and the government have kept the letter’s contents secret ever since. The government highlighted the absence of any provisions under the RBI Act for making it public, which RBI had earlier stated could result in market disruptions and financial market volatility.
On the subject of whether RBI ought to have kept a record of the meeting’s discussions, the experts Mint consulted were divided. While the RBI draughts the letter to the government, the MPC is responsible for determining the policy repo rate needed to achieve the inflation target.
“The lack of records may be due to the fact that no resolutions were debated or voted on at the meeting on November 3rd. The RBI letter that was ultimately delivered to the government would likely have only been shown to the MPC’s contents “a source with knowledge of the process said.
While the central bank is mandated to publish the minutes of MPC meetings, a former RBI executive who spoke on the condition of anonymity claimed that this wasn’t a routine meeting to discuss inflation and policy rates. In the sake of maintaining economic and financial stability, regulatory organisations, according to the former official, should have some latitude in the information they choose to divulge.
Since the law does not distinguish between one MPC meeting and another, transparency proponents contend the RBI must keep records whenever the members of the rate-setting body meet. It’s interesting to note that from January 2020, RBI has begun publishing cleaned-up transcripts of its central board sessions. Such reports were previously only disclosed in accordance with India’s transparency law, the RTI Act.
“According to Section 45ZL of the RBI Act, RBI must immediately publish the minutes of the MPC meeting. Given that they have yet to comply with this legal requirement (in the instance of the meeting on November 3), even after so many months, “said Mukund P. Unny, a Supreme Court attorney-on-record.
Yet, Section 45ZL also states that the resolution approved at the meeting and each committee member’s vote must be included in the minutes. Others countered that minutes are not required since there were no specific resolutions up for vote at this meeting.
