How does one become RBI governor?
April 09, 2021
The Reserve Bank of India is one of the most powerful entities in our country and governs the entire economy of the nation. The Reserve Bank of India is India’s central bank and regulatory body under the jurisdiction of the Ministry of Finance, Government of India. That being said, the RBI governor is one of the most powerful persons of the nation, but how and on what notions is he/she appointed?
- The Reserve Bank’s affairs are governed by a Central Board of Directors (CBD).
- Members of the board are appointed by the Government of India by Section 8 of the Reserve Bank of India Act.
- The CBD as the administrative apex body of the RBI contains two sets of directors. First is the official directors and second, non-official directors.
- The official directors are comprised of the Governor and not more than four Deputy Governors who are appointed/nominated by the Central Government under the RBI Act. RBI Governors is thus appointed by the Government.
- Besides the official directors, there can be fourteen non-official directors as well in the CBD. The government can nominate two government officials into the CBD.
- Salaries and allowances of the Governor and Deputy Governors may be determined by the Central Board, with the approval of the Central Government. The governor can be removed by the government.
- The Governor and Deputy Governors hold office for periods not exceeding five years. The term of the governor may be fixed by the government at the time of his appointment. (Urjit Patel and Raghuram Rajan were appointed for three years; though a governor can get five-year tenure). Governor (and also Deputy Governors) is eligible for reappointment or extension.
Well, the above points are the procedures but any person with a degree/post-graduate/CA can become Governor of RBI provided the person
- Has worked as General Manager/ED/Chairman of a Bank
- Has worked in Finance Dept of Govt.of India
- Has worked at IMF/World bank
- Has a very good experience in banking and financial institutions.
- Has worked in any world reputed financial/banking organization etc.
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