What is section 7 of the RBI Act?

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In an unprecedented move, the government has reportedly invoked Section 7 of the Reserve Bank of India Act.Former Union Minister P Chidambaram tweeted today,”If, as reported, Government has invoked Section 7 of the RBI Act and issued unprecedented directions’ to the RBI, I am afraid there will be more bad news today”.Chidambaram also asked what was the need to invoke the provision [Section 7] now.We did not invoke Section 7 in 1991 or 1997 or 2008 or 2013. What is the need to invoke the provision now? It shows that government is hiding facts about the economy and is desperateP. Chidambaram (@PChidambaram_IN) October 31, 2018So, what does Section 7 of the RBI Act say?According to Section 7 of the RBI Act the central government is empowered to issue directions it considers necessary for public interest to the central bank from time to time after consultation with the RBI governor.”The Central Government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public inter­est,” Section 7(1) of the RBI Act reads.The sub-section under Section 7 further reads, “Subject to any such directions, the general superintendence and direction of the affairs and business of the Bank shall be entrusted to a Central Board of Directors which may exercise all powers and do all acts and things which may be exercised or done by the Bank.”Section 7(3) reads,”Save as otherwise provided in regulations made by the Central Board, the Governor and in his absence the Deputy Governor nominated by him in this behalf, shall also have powers of general superintendence and direction of the affairs and the business of the Bank, and may exercise all powers and do all acts and things which may be exercised or done by the Bank.”However, complete implication of the section cannot be determined because it has never been invoked in the history of independent India.Also Read | Urjit Patel considering resigning as RBI governor after rift with govt: ReportAlso Read | Modi govt ups pressure on RBI as Jaitley blames central bank for bad loans crisisAlso Read | Why RBI and government are fighting
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