Consider the following statements:
1) The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government.
2) Certain provisions in the Constitution of India give the Central Government the right to issue directions to the RBI in public interest.
3) The Governor of the RBI draws his power from the RBI Act.
Which of the above statements are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: c
Explanation:
According to Section 8 of the Reserve Bank of India Act 1934 – the Governor and not more than four Deputy Governors of RBI are to be appointed by the Central Government;
The Governor and a Deputy Governor shall hold office for such term not exceeding five years as the Central Government may fix when appointing them, and shall be eligible for re-appointment.
Hence, statement 1 is correct.
According to Section 7 (1) in the Reserve Bank of India Act, 1934 – The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest.
The RBI Governor and deputy governor are appointed through the Prime Minister’s Office on the recommendation of Finance Ministry.
Hence, statement 2 is incorrect.
Section 7 (3) in The Reserve Bank of India Act, 1934
The Governor and, in his absence, the Deputy Governor nominated by him in his behalf shall also have powers of general superintendence and direction of the affairs and the business of the Bank, and may exercise all powers and do all acts and things which may be exercised or done by the Bank.
Hence, statement 3 is correct.
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