What is the tenure of the Central Board of Directors in Reserve Bank of India?

Correct option is B

Correct Answer: (B) Four years

Explanation:

• The Central Board of Directors of the Reserve Bank of India (RBI) is appointed for a term of four years.
• The board consists of the Governor and Deputy Governors, along with other directors nominated by the Government of India from various fields such as economics, banking, and finance.

Information Booster:

• Official Directors: The Governor and up to four Deputy Governors.
• Non-Official Directors: Ten directors nominated by the Government of India, and two government officials.
• Local Boards: The RBI has four local boards (Western, Eastern, Northern, and Southern), each consisting of five members appointed by the Government of India for a term of four years.

Reserve Bank of India (RBI):

1. Established:
• The RBI was established on 1st April 1935 under the Reserve Bank of India Act, 1934.
2. Headquarters:
• Located in Mumbai, Maharashtra.
3. Functions:
• Monetary Policy: Regulates inflation and manages interest rates.
• Currency Issuance: Issues and manages the supply of the Indian Rupee.
• Banker to the Government: Acts as the banker and financial advisor to the Government of India.
• Regulation of Banks: Regulates commercial banks, cooperative banks, and non-banking financial companies (NBFCs).
• Management of Foreign Exchange: Manages the Foreign Exchange Management Act (FEMA) and ensures stable foreign exchange rates.
4. Governor:
• The Governor is the chief executive officer of the RBI, currently appointed for a three-year term.
5. Deputy Governors:
• The RBI has four Deputy Governors, who assist the Governor in various areas like monetary policy, supervision, financial markets, and currency management.
6. Ownership:
• The RBI is wholly owned by the Government of India, and its stock is held by various Indian and foreign institutions.
7. Role in Financial Inclusion:
• Promotes financial inclusion by ensuring access to banking services in remote and underserved areas of the country.
8. Regulatory Powers:
• RBI has significant regulatory powers in terms of banking operations, financial market regulations, and the issuance of currency.