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?
- A1 and 2 only
- B2 and 3 only
- C1 and 3 onlyCorrect
- D1, 2 and 3
Explanation
Statement 1: The Governor of the Reserve Bank of India (RBI) is appointed by the Central Government. This is a fundamental aspect of the RBI's governance structure, with the appointment being made by the Appointments Committee of the Cabinet (ACC).
Statement 2: While the Central Government does have powers to issue directions to the RBI in public interest (e.g., under Section 7 of the RBI Act, 1934), these provisions are laid down in the Reserve Bank of India Act, 1934, which is a statutory law, not directly in the Constitution of India. The Constitution lays down the framework of the state, but specific operational details for statutory bodies like the RBI are governed by acts of Parliament.
Statement 3: The powers, functions, and responsibilities of the Governor of the RBI, as well as the overall framework for the RBI's operations, are derived from the Reserve Bank of India Act, 1934. This Act defines the RBI's mandate and the authority of its top management.
Therefore, statements 1 and 3 are correct.
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