Currency is issued by:a)RBI on behalf of central governmentb)By president of India.c)By finance ministerd)None of themCorrect answer is option 'A'. Can you explain this answer?

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UPSC Exam > UPSC Questions > Currency is issued by:a)RBI on behalf of cent...

Currency is issued by:

a)
RBI on behalf of central government
b)
By president of India.
c)
By finance minister
d)
None of them

Correct answer is option 'A'. Can you explain this answer?

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Currency is issued by:a)RBI on behalf of central governmentb)By presid...

The Reserve Bank has the sole right to issue currency notes, except one rupee notes which are issued by the Ministry of Finance.The RBI follows a minimum reserve system in the note issue. Initially, it used to keep 40 per cent of gold reserves in its total assets. But, since 1957, it has to maintain only Rs. 200 crores of gold and foreign exchange reserves, of which gold reserves should be of the value of Rs. 115 crores. As such, India has adopted the “managed paper currency standard.”As a currency authority, the Reserve Bank provides different denominations of currency for facilitating the transactions of the Central and State Governments, and caters to the exchange and remittance needs of the public, banks as well as the government departments.The bank has established 14 offices of the Issues Department for the discharge of its currency functions. At all the other centres of the country, the currency requirements are met by the bank through currency chests. Currency chests are maintained by the bank with the branches of the SBI group, Government Treasuries and Sub-Treasuries, and public sector banks.

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