Recent demonetisation process has unfolded the importance of RBI’s Central Board of Directors (CBD). The CBD has consented the government for withdrawing the legal tender status of Rs 500 and Rs 1000 notes on November 8, 2016.
The Central Board of Directors is at the top of the Reserve Bank’s organizational structure and the affairs of the RBI are governed by it. Important decisions of the RBI are taken by the Central Board as it is the apex authority of the RBI.
Constitution of the Central Board of Directors
The CBD members are appointed by the Central Government. Section 8 of the RBI Act 1934 instructs about the composition of the Central Board. Members of the Board are appointed for a period of four years.
The Central Board has the primary authority and responsibility for the oversight of the Reserve Bank. General superintendence and direction of the Bank's affairs is the core function of the CBD. It delegates specific functions to the Local Boards and various committees. The other wings of the RBI like Board for Financial Supervision and other technical committees derive their power from the CBD.
Official Directors: The governor and four deputy governors are automatically members of the CBD and they are known as the official directors.
Non-official Directors: Besides the official directors, the RBI Act empowers the government to nominate non-official directors comprised of:
- Ten Directors from various fields and Two Government Officials
- Four Directors - one each from four local boards
As on April 24, 2017, the CBD has fourteen Directors including the Governor Urjit Patel, Deputy Governors – Shri R Gandhi, Shri SS Mundra,Shri NS Viswanathan, Sri BP Kanungo and Shankar Acharya. Besides these official directors, the other directors are Dr Nachiket Mor, Shri Natarajan Chandrasekaran, Shri Bharat Narotam Doshi, Shri Sudhir Mankad, Dr Rajiv Kumar, Dr Ashok Gulati, Sri Manish Sabharwal, Ms Anjuly Chib Duggal and Sri Shaktikanta Das.