Question
Q1. Considered the following document
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 direction to the RBI in Public interest.
3. The government of the RBI draws is power form the RBI Act
Which of the above statements are correct?
A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Answer: C
Detailed Explanation
The RBI Governors are appointed by the government of India for a fixed time period. Hence statement 1 is correct.
Nothing is mentioned in the Constitution of India that gives the Central Government the right to issue directions to the RBI in the public interest. Hence statement 2 is incorrect.
The Governor of the RBI draws his power from the RBI Act. Hence statement 3 is correct.
The Reserve Bank of India was established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934.RBI is not a constitutional body.
The Governor of the Reserve Bank of India is the Chief Executive Officer of the Central Bank of India and the Ex-officio Chairman of its Central Board of Directors.
Power and Function of RBI Governor:-
The RBI governors are responsible for maintaining the monetary stability in an economy.
He plays an important role in formulating the policies of the Reserve Bank of India.
He has the responsibility for issuing licenses to open new foreign and private banks.
The Governor of RBI manages the external trade and payment also promotes orderly development and maintenance of the foreign exchange market in India which comes under the foreign exchange management act, 1999.
Through Urban Bank Departments, the RBI governor leads and supervises primary cooperative banks.
The responsibility for regulating state cooperative banks, regional rural banks, and various local area banks.
