Section 8 of the Reserve Bank of India Act, 1934 - Composition of the Central Board and Term of Office of Directors
Section 8 specifies who constitutes the Central Board of Directors of the Reserve Bank of India and lays down important rules concerning appointment, whole-time service, participation in Board meetings, tenure, reappointment and continuity of Board proceedings.
Section 8(1) - Composition of the Central Board
The Central Board consists of the following Directors:
- a Governor and not more than four Deputy Governors appointed by the Central Government;
- four Directors nominated by the Central Government, one from each of the four Local Boards constituted under Section 9;
- ten Directors nominated by the Central Government; and
- two Government officials nominated by the Central Government.
This structure combines the executive leadership of the Bank, representation linked to the Local Boards, other Central Government nominees and Government officials. The reference to two Government officials reflects the current consolidated statutory text.
Section 8(2) - Whole-time service and remuneration
The Governor and Deputy Governors must devote their whole time to the affairs of the Bank. Their salaries and allowances are determined by the Central Board with the approval of the Central Government.
The Central Board may, where it considers this necessary in the public interest, permit the Governor or a Deputy Governor to undertake part-time honorary work at the request of the Central Government or a State Government, provided that the work is not likely to interfere with the person's RBI duties.
The provision also authorises the Central Government, in consultation with the Bank, to appoint a Deputy Governor as Chairman of the National Bank on terms and conditions specified by the Government. In this context, the statutory expression "National Bank" refers to the institution defined in Section 2 of the RBI Act.
Section 8(3) - Attendance, deliberation and voting
A Deputy Governor and a Director nominated under Section 8(1)(d) may attend meetings of the Central Board and participate in deliberations, but are not entitled to vote. However, if the Governor cannot attend a meeting, a Deputy Governor authorised by the Governor in writing may vote on the Governor's behalf at that meeting.
Section 8(4) - Term of office and reappointment
The Governor and a Deputy Governor hold office for a term fixed by the Central Government at the time of appointment, subject to a maximum of five years, and are eligible for reappointment.
A Director nominated under Section 8(1)(c) holds office for four years and is eligible for reappointment, but cannot be appointed for more than two terms, meaning a maximum of eight years whether continuously or intermittently.
A Director nominated under Section 8(1)(d) holds office during the pleasure of the Central Government.
Section 8(5) - Vacancies and defects in constitution
An act or proceeding of the Central Board cannot be questioned merely because a vacancy exists on the Board or because there is a defect in its constitution. This provision protects the continuity of Board functioning against challenges founded only on such a vacancy or defect.
Section 8(6) - Omitted
Subsection (6) stands omitted. The statutory amendment history should be read from the official consolidated Act for the precise footnote and effective date.
Section 8(7) - Retiring Director
A retiring Director is eligible for re-nomination. This operates alongside the specific tenure restrictions applicable to Directors nominated under Section 8(1)(c).