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CS Professional · Banking and Insurance - Laws and Practice · Overview of Indian Banking System

Meera, a businesswoman from Chennai, was appointed by the Central Government as a member of the Southern Area Local Board of the RBI and served one four-year term, then a second four-year term. She is proposed for a third appointment. What is the position under the Reserve Bank of India Act, 1934?

Meera cannot be appointed for a third term. Section 9(3) of the RBI Act limits a Local Board member to two terms of four years, a maximum of eight years, whether served continuously or intermittently, so a gap or consent does not help.

  1. AShe cannot be appointed again, as a member cannot serve more than two terms, a maximum of eight years, continuously or intermittentlyCorrect
  2. BShe can be appointed again, as reappointment has no limit
  3. CShe can be appointed again only after a gap of four years
  4. DShe can serve a third term if the Local Board chairman consents

Explanation

Section 9(3) gives members a four-year term with eligibility for reappointment, but the proviso bars appointment for more than two terms, i.e. a maximum of eight years, whether continuous or intermittent. A gap does not reset the limit. Meera has completed eight years.

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