Section 8 of RBI Act : Section 8: Composition Of The Central Board, And Term Of Office Of Directors

Explanation using Example

Imagine the government wants to appoint a new Governor to the Reserve Bank of India (RBI). According to Section 8 of the RBI Act, 1934, the appointment is made by the Central Government. The newly appointed Governor, along with not more than four Deputy Governors, will form part of the Central Board of Directors of the RBI. These officials are dedicated full-time to the bank's affairs and receive salaries approved by the Central Board with the Central Government's consent.

For example, if the current Governor is nearing the end of their term, the government will look for a suitable candidate. Once appointed, the Governor may serve a term not exceeding five years and can be re-appointed for another term. The Governor's role is crucial in shaping the monetary policy of the country, and this process of appointment ensures that a qualified individual is at the helm of the RBI.