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?
Explanation
Statement 1 is correct: Under Section 8(1)(a) of the RBI Act, 1934, the Governor and not more than four Deputy Governors are appointed by the Central Government via the Appointments Committee of the Cabinet (ACC).
Statement 2 is incorrect: The Constitution of India makes no mention of the RBI. The Central Government’s power to issue directions to the Bank in public interest is a statutory provision under Section 7(1) of the RBI Act, 1934 (after consultation with the Governor), not a constitutional mandate.
Statement 3 is correct: Section 7(3) of the RBI Act provides that the Governor shall have powers of general superintendence and direction of the affairs and business of the Bank, and may exercise all powers which may be exercised by the Bank.
Since statements 1 and 3 are correct, the answer is Option C.