Q. 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 the public interest.
3. The Governor of the RBI draws his power from the RBI Act.

Which of the above statements are correct?

  • 1 and 2 only
  • 2 and 3 only
  • 1 and 3 only
  • 1, 2 and 3

Answer: c) 1 and 3 only

Notes:
  • The RBI Governors are appointed by the government of India for a fixed time period.
  • The Reserve Bank of India was established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934. RBI is not a constitutional body.
    • Hence, nothing is mentioned in the Constitution of India that gives the Central Government the right to issue directions to the RBI in the public interest.
  • The Governor of the Reserve Bank of India is the Chief Executive Officer of the Central Bank of India and the Ex-officio Chairman of its Central Board of Directors.
  • The Governor of the RBI draws his power from the RBI Act.