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?

Question

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? ​

CollectorBabu · Accepted Answer

Correct Answer: 1 and 3 only ​. Statement 1 is correct. The Governor may be appointed for a term not exceeding five years. The tenure is mentioned before the appointment by the Government. RBI Governor is appointed based on the recommendations of the Financial Sector Regulatory Appointments Search Committee which is headed by the Cabinet Secretary.  Statement 2 is wrong as the Central Government can give directions to RBI as per section 7 of RBI Act, 1934 and not as per constitutional provisions.  Statement 3 is correct as RBI Act, 1934 is the overarching framework of working of RBI.

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