Why is it in the news ?
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Amid the ongoing tussle between the Government and RBI, a meeting of Board of directors is to take place on November 19.
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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
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The Central Board of Directors is at the top of the Reserve Bank’s organisational structure.
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Important decisions of the RBI are taken by the Central Board as it is the apex authority of the RBI.
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The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.
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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:
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The Reserve Bank’s affairs are governed by a central board of directors.
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It delegates specific functions to the Local Boards and various committees.
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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 :
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Official Directors
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Full-time : Governor and not more than four Deputy Governors
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Non-Official Directors
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Nominated by Government: ten Directors from various fields and two government Official
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Others: four Directors – one each from four local boards.
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The Governor supervises and directs the affairs and business of the RBI.
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The Governor and Deputy Governors hold office for not more than five years.
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The ten directors nominated by the government hold office for four years
Meetings:
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The Governor has to call a Board meeting at least six times in a year, and at least once each quarter.
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A meeting can be called if a minimum of four Directors ask the Governor to call a meeting.
Source
The Hindu, RBI.