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?
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A hard Economy multiple-choice question from UPSC Prelims 2021. Attempt it above, then check the correct answer and detailed explanation below.
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Correct answer: C. 1 and 3 only
Statements 1 and 3 are correct — the RBI Governor is appointed by the Central Government and draws power from the RBI Act, 1934. Statement 2 is wrong — the power to direct the RBI comes from the RBI Act, not from the Constitution.
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