RBI Governor
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RBI Governor

Context:

The central government Revenue Secretary Sanjay Malhotra as the new Governor of the Reserve Bank of India for a three-year term.

More On News:

  • Sanjay Malhotra is an IAS officer from the 1990 Rajasthan cadre and is the 26th person to hold this position.
  • He has played a significant role in shaping India’s financial landscape.
  • He has a Computer Science degree from IIT Kanpur and a Master’s in Public Policy from Princeton University, USA.

RBI Governor Appointment

  • The Reserve Bank of India (RBI) is the country’s central bank, responsible for regulating the banking system, issuing the Indian rupee, controlling inflation, and acting as the government’s banker.
  • The RBI operates under the Ministry of Finance, Government of India.
  • RBI Governor Appointment:
    • The RBI governor is appointed by the Prime Minister’s Office (PMO), based on the Finance Minister’s recommendation.
    • The Financial Sector Regulatory Appointment Search Committee (FSRASC) conducts interviews for the role.
    • FSRASC members: Cabinet secretary, RBI governor, financial services secretary, and two independent members.
    • After the committee’s selection, the name is sent to the Appointments Committee of the Cabinet (headed by the Prime Minister) for final approval.
  • Deputy Governors:
    • The governor and up to four deputy governors are appointed by the central government under the RBI Act.
    • Their term is for up to 5 years, which can be extended.
    • The deputy governors include:
      • Two from within RBI,
      • One from a commercial bank,
      • One economist for monetary policy.
  • RBI Board and Management:
    • The salaries and allowances of the governor and deputy governors are determined by the RBI’s central board, with the approval of the government.
    • The RBI’s central board includes:
      • The RBI governor and up to four deputy governors,
      • Nominated non-official directors from various fields,
      • Directors from four local boards representing different regions of India.
  • Powers in Case of Absence:
    • If the governor is absent or incapacitated, a deputy governor nominated by the governor takes over the duties of the governor.
    • The central board has general superintendence and direction over the affairs of the RBI, as per Section 7 of the RBI Act.

About RBI:

  • The Reserve Bank of India was established on 1st April 1935 under the RBI Act, of 1934.
  • On 1st January 1949, RBI was Nationalised.
  • Sir C. D. Deshmukh was the first Indian Governor of RB

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