Policy Rates and Tools — Policy Reforms

Entry	Year	Description	Impact
RBI Act Amendment	2016	Established the Monetary Policy Committee (MPC) as a statutory body with six members, including three from RBI and three external members appointed by the government. The amendment formalized inflation targeting as the primary objective of monetary policy.	Transformed monetary policy decision-making from a single-person authority to a committee-based approach, enhancing transparency and accountability. The MPC structure ensures diverse perspectives in policy formulation while maintaining RBI's operational autonomy.
Banking Regulation Act Amendment	2020	Enhanced RBI's regulatory powers over cooperative banks and provided greater flexibility in resolution mechanisms. The amendment also strengthened the legal framework for monetary policy implementation across different types of banking institutions.	Expanded the scope of monetary policy transmission by bringing cooperative banks under RBI's direct supervision, ensuring more uniform implementation of policy measures across the banking system.