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UPSC Prelims 2021 Paper-1 📅 10 Oct, 2021

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
Result Summary
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UPSC Prelims
2021 • 10 Oct, 2021 • Paper-1
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
1 and 3 only
Appointment Protocol: The Central Government has the authority to appoint the Governor and Deputy Governors of the Reserve Bank of India under the stipulations ......
Ref/Book : UPSC Prelims 2021
Ref. Subject Economy
Chapter -
Ref. Topic Banking and Finance
Pg. No -
💡 Analysis & Explanation
Appointment Protocol ▼
The Central Government has the authority to appoint the Governor and Deputy Governors of the Reserve Bank of India under the stipulations of the RBI Act. Hence, the first statement is true.
Constitutional Validity ▼
The Constitution of India contains no explicit provisions that empower the Central Government to issue directives to the RBI. This specific power is derived from Section 7 of the RBI Act, 1934, rendering the second statement incorrect.
Source of Authority ▼
The Governor of the RBI functions and derives their administrative and executive powers directly from the framework established by the Reserve Bank of India Act, 1934. Therefore, the third statement is accurate.
Conclusion ▼
Only statements 1 and 3 are correct.
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