Q.Explain the composition of the Central Board of Directors of the RBI.

The Central Board mixes officials who run the RBI day-to-day with non-officials who bring outside representation, and the syllabus expects both categories to be named precisely.

The Central Board of Directors of the RBI, appointed by the Central Government under the RBI Act, 1934, has two categories of members:

Official Directors: the Governor and not more than four Deputy Governors, who are full-time RBI officials responsible for its day-to-day administration.

Non-Official Directors: up to four Directors, one nominated to represent each of the four Local Boards (Western, Eastern, Northern, Southern); up to ten Directors nominated from various fields such as industry, commerce, agriculture and cooperation, bringing outside expertise to the Board; and one Government official, nominated by the Central Government to represent the Government's own interest on the Board.

This structure is designed to combine professional central-banking management (the Governor and Deputy Governors) with regional representation and outside expert opinion (the non-official directors).

Omitting the Local Board representatives or the Government-nominated official from the non-official category, or believing the Board consists only of the Governor and Deputy Governors.