Section 45ZE of RBI Act : Section 45Ze: Removal Of Members Of Monetary Policy Committee

Explanation using Example

Imagine a scenario where Mr. Sharma, a distinguished economist, was appointed to the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI). A few months into his tenure, it was discovered that Mr. Sharma had failed to disclose his substantial shares in a private bank, which could potentially influence his decisions on the MPC. This non-disclosure is a material conflict of interest and falls under clause (d) of Section 45ZE of the RBI Act, 1934.

Under this section, the Central Government has the authority to remove Mr. Sharma from his position on the MPC for failing to adequately disclose this conflict of interest at the time of his appointment. However, before taking any removal action, the government must give Mr. Sharma a reasonable opportunity to be heard in the matter, as per subsection (2) of Section 45ZE, to ensure fairness and due process.