RBI Act, 1934
Monetary Policy Provisions Inserted in 2016
The RBI Act was amended through the Finance Act, 2016 to insert a new Chapter IIIF (Sections 45ZA to 45ZI) that laid out the complete legal architecture for flexible inflation targeting. This was a landmark structural reform: it shifted monetary policy from an executive/discretionary process to a legislated, institutionalised one. The amendment gave the RBI a clear, publicly mandated primary objective for the first time in its history.
- Section 45ZA: Government notifies inflation target every 5 years in consultation with RBI.
- Section 45ZB: Constitution of the MPC (6 members, majority vote, Governor has casting vote).
- Section 45ZL: MPC minutes to be published within 14 days of each meeting.
- Section 45ZN: RBI must publish a Monetary Policy Report every 6 months with inflation projections.
- The 2016 amendment also formalised the Governor's role as MPC Chair, clarifying the relationship between government-appointed and RBI-appointed members.
● Tracked since March 25, 2026 · last seen April 27, 2026 · updates as the daily brief publishes
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