Consider the following statements : 1. The Governor of the Reserve

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
This question was previously asked in
UPSC IAS – 2021
The correct option is C. Statements 1 and 3 are correct, while statement 2 is incorrect.
– The Governor of the Reserve Bank of India is appointed by the Central Government of India. Statement 1 is correct.
– The power of the Central Government to issue directions to the RBI in public interest is derived from Section 7 of the Reserve Bank of India Act, 1934, not directly from the Constitution of India. Statement 2 is incorrect.
– The powers and functions of the RBI Governor are defined and drawn from the Reserve Bank of India Act, 1934. Statement 3 is correct.
Section 7(1) of the RBI Act states: “The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest.”
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