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CS Professional · Banking and Insurance - Laws and Practice · Regulatory Framework of Banks

At an MPC meeting attended by all six Members, three vote to raise the policy rate and three vote against. The Governor is presiding. How is the question decided under the RBI Act, 1934?

The Governor has a second or casting vote. Questions before the MPC are decided by a majority of Members present and voting, and when votes are equal the Governor's casting vote, added to his own vote, resolves the matter.

  1. AThe proposal lapses automatically because there is no majority
  2. BThe Governor has a second or casting vote, in addition to his original voteCorrect
  3. CThe Central Government decides the tie by conveying its view in writing
  4. DThe matter is referred to the Central Board, which votes on it

Explanation

Under Section 45Z-I(8), questions are decided by a majority of Members present and voting, and on an equality of votes the Governor has a second or casting vote. The Central Government may convey its views under sub-section (9), but it does not decide ties.

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