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?
Show answer
Answer: C. Statement 1 is correct: under Section 8 of the RBI Act, 1934, the Central Government appoints the Governor. Statement 2 is wrong: the power to give directions to RBI in public interest comes from Section 7 of the RBI Act, not from the Constitution. Statement 3 is correct: the Governor's powers flow from the RBI Act. So only 1 and 3.
Watch for: Students assume the Centre's power over RBI is constitutional; it is only statutory (Section 7, RBI Act).
Why the other options are wrong
- A. Wrong because statement 2 is wrong; the direction power is in the RBI Act, not the Constitution.
- B. Wrong because statement 2 is wrong and statement 1 is correct.
- D. Wrong because the Constitution does not give the Centre power to direct RBI.
Source to check: Reserve Bank of India Act, 1934, Sections 7 and 8; RBI website (About Us)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.