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?
Answer & explanation
Answer: (c) 1 and 3 only
Everything in this question comes from the Reserve Bank of India Act, 1934, not from the Constitution. The Act lets the Centre appoint the Governor and give the RBI directions in the public interest, and it is also the source of the Governor's own powers. So only statement 2 is wrong.
- ✓ 1. Section 8(1)(a) of the RBI Act provides that the Governor and the Deputy Governors (not more than four) are appointed by the Central Government.
- ✗ 2. The Constitution contains no such provision. The power to direct the RBI is statutory: Section 7(1) of the RBI Act lets the Centre, after consulting the Governor, issue directions it considers necessary in the public interest.
- ✓ 3. Section 7(3) of the RBI Act gives the Governor powers of general superintendence and direction of the Bank's affairs and business, subject to regulations made by the Central Board.
Remember · RBI Act, 1934: Section 7 lets the Centre direct the RBI in public interest after consulting the Governor; Section 8 has the Centre appoint the Governor and Deputy Governors.
Sources
- Reserve Bank of India Act, 1934 (RBI publication), Section 8(1)(a) ↗ “a Governor and 2[not more than four] Deputy Governors to be appointed by the Central Government … 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. … the Governor and in his absence the Deputy Governor nominated by him in this behalf, shall also have powers of general superintendence and direction of the affairs and the business of the Bank”
Question and answer: UPSC's official GS Paper I (2021, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·