Section 54AA of RBI Act : Section 54Aa: Power Of Bank To Depute Its Employees To Other Institutions

Explanation using Example

Imagine that the Reserve Bank of India (RBI) has a highly skilled cybersecurity expert, Mr. Sharma, as part of its staff. The National Payments Corporation of India (NPCI), which is an institution substantially owned by the RBI, is facing a significant challenge in enhancing its digital security framework.

Under Section 54AA of the Reserve Bank of India Act, 1934, the RBI decides to depute Mr. Sharma to NPCI for a period of two years to assist in strengthening their cybersecurity measures. During this period, Mr. Sharma will work for NPCI, but his salary and benefits will remain the responsibility of the RBI, and he will not face any reduction in his terms of service due to this deputation.

This deputation is beneficial for NPCI, which gets the expertise of Mr. Sharma, and for Mr. Sharma, who continues to enjoy his employment benefits from RBI while gaining new work experience. The RBI uses its power under this section to support its owned institution without compromising the rights and benefits of its employee.