Context:
Sanjay Malhotra was appointed as the 26th Governor of the Reserve Bank of India.
How is the RBI Governor appointed?
- The governor is appointed as per the RBI Act, 1934.
- Appointed by the Central government.
- Procedure –
- Financial Sector Regulatory Appointment Search Committee, consisting Cabinet Secretary, current RBI Governor, Financial Services Secretary and 2 independent members, prepares a list of people eligible to hold the post.
- Next, the shortlisted candidates are interviewed and sent to the Cabinet Committee on Appointments, headed by the Prime Minister, which finally selects the governor through confirmation of the appointment.
- Tenure – Holds office for a period not exceeding 5 years.
- The term of the governor may be fixed by the government at the time of his appointment.
- He/She is eligible for reappointment or extension
- RBI Governor qualifications –
- RBI Act, 1934 does not mention any specific qualification for the governor.
- People with different educational backgrounds were selected to head the institution.
- However, the governor traditionally is either civil services personnel or economists
Source: Economic Times
Previous Year Question
Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?
1. It decides the RBI’s benchmark interest rates
2. It is a 12-member body including the Governor of RBI and is reconstituted every year.
3. It functions under the chairmanship of the Union Finance Minister.
Select the correct answer using the code given below:
[UPSC Civil Services Exam – 2017 Prelims]
(a) 1 only
(b) 1 and 2 only
(c) 3 only
(d) 2 and 3 only
Answer: (a)
Explanation:
Statements 2 and 3 are incorrect. MPC is a 6-member body. It functions under the chairmanship of the RBI Governor.