RBI To Send Centre Report On Its Failure To Check Inflation Since January

The Reserve Bank of India Act mandates that in the case of the inflation target not being met for three consecutive quarters, the central bank has to submit a report to the government explaining the reasons.

With inflation staying above the upper tolerance limit for nine straight months, the Reserve Bank will now have to submit a report to the central government detailing reasons for the failure to contain prices and remedial steps to rein in the price rise.

The Reserve Bank of India Act mandates that in the case of the inflation target not being met for three consecutive quarters, the central bank has to submit a report to the government explaining the reasons and detail the remedial actions it will be taking to check the price rise.

This will be the first time since the onset of the Monetary Policy Framework which came into effect in 2016 that the RBI will be made to explain its actions in a report to the government.

As per the mandate given to the Reserve Bank by the Union Government, the central bank is required to ensure retail inflation remains at 4 per cent with a margin of 2 per cent on either side.