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?
✓ Correct answer: c) 1 and 3 only
ExplanationStatement 1 is correct : The Reserve Bank’’s affairs are governed by a central board of directors.The board is appoint- ed by the Government of India in keeping with the Reserve Bank of India Act,1934. Statement 2 is incorrect : The Constitution of India does not contain provisions granting the Central Government the au- thority to issue directions to the RBI.However, such author- ity is provided under Section 7 of the Reserve Bank of India Act, 1934. This section allows the Central Government to issue directions to the RBI in matters of public interest.Accordingly 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 it necessary in the public interest.Statement 3 is correct : The powers and functions of the RBI Governor are derived from the Reserve Bank of India Act, 1934. The Act outlines the roles, responsibilities, and authority of the Governor in managing the affairs of the RBI.Functions of RBI Monetary AuthorityFormulates, implements and monitors the monetary policy.Maintain
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