Consider the following statements: 1. The Governor of the Reserve Bank of India (RBI) is appointed by the…
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?
1 and 2 only
2 and 3 only
1 and 3 only
1, 2 and 3
Solution
The RBI Governor is appointed by the Central Government (Statement 1 correct). The Constitution does NOT have provisions for the Central Government to issue directions to RBI; the power flows from the RBI Act, 1934 (Statement 2 incorrect). The Governor draws his power from the RBI Act (Statement 3 correct).