Formation of the Monetary Policy Committee entrusted with the task of deciding interest rates is at an advanced stage and the government will soon appoint members of the high-level panel.
"The appointment process is at a very advanced stage. There are no roadblocks left. Members can be announced in the next month as candidates have been short-listed," sources said.
The six-member MPC will include RBI Governor and three nominees of the government, which has a mandate to bring consumer or CPI inflation to the pre-set target.
The next policy may be announced by MPC if things are in place by then, sources added.
The next bi-monthly monetary policy for 2016-17 is scheduled for August 9.
The non-government nominees on MPC include the Governor himself, who is the the ex-officio chairman, a Deputy Governor and an executive director of RBI. Each member shall have one vote and in the case of a tie, the Governor shall have the casting vote. Members will be appointed for four years and shall not be eligible for reappointment.
The panel will meet at least four times in a year and the government may, if it considers necessary, convey its views in writing to MPC from time to time.
Every six months, RBI will publish the Monetary Policy Report explaining sources of inflation and its forecast for 6-18 months.
If RBI for some reason fails to meet inflation target, it shall give reasons in the report thereof, remedial actions as well as estimated time within which the target shall be achieved.
Under the current scheme of things, the Governor has overriding powers to accept or reject the recommendation of RBI's panel on monetary policy.
