The central bank has announced an additional meeting of the Monetary Policy Committee on Nov. 3.
The meeting would be convened under Section 45ZN of the RBI Act, which spells out the course of action by the central bank if it fails to meet the inflation target, according to an RBI statement.
Under the section, the central bank is required to submit a report to the central government explaining the reasons for its failure to achieve the inflation target, remedial actions proposed to be taken by the bank, and an estimate of the time-period within which the inflation target shall be achieved pursuant to timely implementation of proposed remedial actions.
"The factors that constitute failure shall be such as may be notified by the Central Government in the Official Gazette, within three months from the date of the commencement of Part I of Chapter XII of the Finance Act, 2016," the act says.
The inflation targeting framework requires that inflation remains within the tolerance band of 4%(+/-2%).
Headline inflation has stayed above the RBI's upper target for nine straight months, according to the latest print for September when it breached 7.41%. To quell inflation, the MPC has raised the policy repo rate by 190 basis points to 5.9% since May.
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