The central government has started the process of appointing three new external members to the monetary policy committee (MPC) with the term of the existing experts ending on October 4.

The names of the members are likely to be announced before the next three-day MPC meeting which will commence on October 7, various media reports said on Friday.

The MPC, which decides on interest rates, has six members: three from the RBI and the rest picked by the central government. The external members are well known in the fields of macro-economics or finance and they have a term of four years.

Their tenure cannot be extended, according to the current provisions of the RBI Act.

In October 2020, the Centre announced the appointment of Ashima Goyal, Jayanth R. Varma and Shashanka Bhide as members of MPC.

Goyal is a professor of Indira Gandhi Institute of Development Research; Varma is a professor, Indian Institute of Management, Ahmedabad; and Bhide, a senior advisor of the National Council of Applied Economic Research, Delhi. They replaced ISI professor Chetan Ghate, Delhi School of Economics director Pami Dua and Ravindra Dholakia, professor at IIM, Ahmedabad.

Their entry into the panel had come after a meeting during September 29-October 1, 2020 was rescheduled as the new members were not appointed. The MPC has been mandated to keep inflation at 4 per cent with a band of 2 per cent on either side.

The recast of MPC comes at a time pressure is growing on RBI governor Shaktikanta Das and other members of MPC to cut rates.

At its last meeting on August 6 to August 8, Goyal and Verma had voted for a cut in the repo rate and a change in the policy stance to neutral.

RBI governor Shaktikanta Das has called for more patience on rate cuts, citing the slow pace of disinflation.