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Board of Directors RBI
Why is it in the news ?
- Amid the ongoing tussle between the Government and RBI, a meeting of Board of directors is to take place on November 19.
- Given the tussle, Central Board of Directors of the Reserve Bank of India (RBI) has recently been a topic of much discussion.
Central Board of Directors
- The Central Board of Directors is at the top of the Reserve Bank’s organisational structure.
- Important decisions of the RBI are taken by the Central Board as it is the apex authority of the RBI.
- The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.
- Section 7 basically empowers the government to supersede the RBI Board and issue directions to the central bank if they are considered to be “necessary in public interest”.
Functions:
- The Reserve Bank's affairs are governed by a central board of directors.
- It delegates specific functions to the Local Boards and various committees.
- The Board is also to recommend to the government the design, form and material of bank notes and also when and where they can serve as legal tender.
Constitution :
- Official Directors
- Full-time : Governor and not more than four Deputy Governors
- Non-Official Directors
- Nominated by Government: ten Directors from various fields and two government Official
- Others: four Directors - one each from four local boards.
- The Governor supervises and directs the affairs and business of the RBI.
- The Governor and Deputy Governors hold office for not more than five years.
- The ten directors nominated by the government hold office for four years
Meetings:
- The Governor has to call a Board meeting at least six times in a year, and at least once each quarter.
- A meeting can be called if a minimum of four Directors ask the Governor to call a meeting.
Source
The Hindu, RBI.