CENTRAL BOARD OF RBI

About:

• The Reserve Bank's affairs are governed by a central board of directors.
  
  
• Appointment procedure: The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.
  
  
• Composition:
  
  

• Mandate:
  • The board members are not responsible for setting the interest rate, but will provide a broader guidance to the central bank.
    
    
  • 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.
    
    
  
  
  
• Board meeting: key facts
  • The Governor has to call a Board meeting at least 6 times in a year, and at least once each quarter. A meeting can be called if a minimum of four Directors ask the Governor to call a meeting.
    
    
  • The Governor or, if for any reason unable to attend, the Deputy Governor authorised by the him to vote for him, presides the Board meetings.
    
    
  • In the event of split votes, the Governor has a second, or deciding vote.
    
    
  
  
  

Recent developments:

• The RBI Board recently entered the news during the public spat between the central bank and the Finance Ministry.
  
  
• One of the issues was the government’s alleged threat of invoking Section 7 of the RBI Act which 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”.