🧷 Classroom Explanation | IAS Monk Standard Format

📌 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?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3

✅ Correct Answer: (c)

🧠 Classroom Explanation

🔹 Statement 1 — Correct

• Section 8 of the RBI Act, 1934 clearly states that the Governor and up to four Deputy Governors are appointed by the Central Government.
• Hence, the appointment power lies with the Executive, not Parliament or the Constitution.

🔹 Statement 2 — Incorrect

• The power of the Central Government to issue directions to the RBI does NOT come from the Constitution of India.
• Instead, this power is derived from Section 7 of the RBI Act, 1934, which allows the government to issue directions in public interest after consultation with the RBI Governor.

🔹 Statement 3 — Correct

• The authority, powers, and functions of the RBI Governor are entirely derived from the RBI Act, 1934, especially Section 7, which grants:
  • General superintendence
  • Direction over RBI’s affairs
  • Authority to exercise all powers of the Bank

🧮 Final Evaluation

➡️ Correct combination: 1 and 3 only

🔍 Curiosity Raiser

Why did the framers intentionally keep RBI powers outside the Constitution, unlike bodies such as the Election Commission?

🧘 IAS Monk Whisper

Institutions draw strength not from distance,
but from clearly written limits.