Section 45ZN of the Reserve Bank of India (RBI) Act, 1934

About:

• This meeting has been called as the RBI has failed to maintain the consumer price index (CPI) inflation target within the 2-6 per cent band for three consecutive quarters, or nine straight months — January to September 2022.
• This is the first time since the RBI adopted an inflation-targeting monetary policy regime in 2016 that an MPC meeting has been called under the provisions of Section 45ZN of the Act.

Section 45ZN of the RBI Act:

• This section says that in case the RBI fails to meet the inflation target, it has to present a report to the government explaining the reasons for the failure.
• In the report, the central bank will have to mention the remedial actions it proposes to take, and an estimated time within which the inflation target will be achieved following the timely implementation of the proposed remedial actions.
• The report is required to be sent to the government within one month from the date on which the RBI failed to meet the inflation target. 

Regulation 7 of the RBI MPC and Monetary Policy Process Regulations, 2016:

• It states that a separate meeting is required to be scheduled as part of the normal policy process to discuss and draft the report to be sent to the government.

Do you know?

• Currently, the Monetary Policy Committee (MPC) meets six times in a financial year, which is every two months.
• The schedule of the MPC meetings for the entire financial year is announced in advance.