<p>The Reserve Bank India (RBI) needs greater independence before it can adopt a monetary policy committee structure, Governor Duvvuri Subbarao said on Monday.<br /><br /></p>.<p>The Reserve Bank of India is one of the few major central banks where monetary policy decisions rest in the hands of the governor, as opposed to a committee. <br /><br />While the Reserve Bank India is not statutorily independent, in practice it has wide latitude in setting monetary policy.<br /><br />"India also needs to move towards a monetary policy committee structure," said Reserve Bank India chief in answer to a question following a speech at the Bank of Mauritius, which has such a committee in place.<br /><br />Successor<br /><br />"For that to happen there are some necessary conditions to be fulfilled and one of the necessary conditions must be more independence of central bank," Subbarao said.<br /><br />India's chief economic adviser, Raghuram Rajan, widely seen as the likely successor to Subbarao, whose terms expires in September, favours moving towards a more powerful monetary policy committee.<br /><br />The Reserve Bank India has a technical advisory committee on monetary policy, which was set up in 2009 as a precursor to a formal policy committee. <br /><br />However, the committee has only an advisory role and Subbarao has in several instances made policy decisions that went against the majority view of the panel.<br /></p>
<p>The Reserve Bank India (RBI) needs greater independence before it can adopt a monetary policy committee structure, Governor Duvvuri Subbarao said on Monday.<br /><br /></p>.<p>The Reserve Bank of India is one of the few major central banks where monetary policy decisions rest in the hands of the governor, as opposed to a committee. <br /><br />While the Reserve Bank India is not statutorily independent, in practice it has wide latitude in setting monetary policy.<br /><br />"India also needs to move towards a monetary policy committee structure," said Reserve Bank India chief in answer to a question following a speech at the Bank of Mauritius, which has such a committee in place.<br /><br />Successor<br /><br />"For that to happen there are some necessary conditions to be fulfilled and one of the necessary conditions must be more independence of central bank," Subbarao said.<br /><br />India's chief economic adviser, Raghuram Rajan, widely seen as the likely successor to Subbarao, whose terms expires in September, favours moving towards a more powerful monetary policy committee.<br /><br />The Reserve Bank India has a technical advisory committee on monetary policy, which was set up in 2009 as a precursor to a formal policy committee. <br /><br />However, the committee has only an advisory role and Subbarao has in several instances made policy decisions that went against the majority view of the panel.<br /></p>