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Consider the following statements and identify the right ones
1. RBI has the sole right to issue currency notes
2. Minimum reserve system has been replaced by proportional reserve system
1. RBI has the sole right to issue currency notes
2. Minimum reserve system has been replaced by proportional reserve system
- a)1 only
- b)2 only
- c)1 and 2 both
- d)None
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
Consider the following statements and identify the right ones1. RBI ha...
Statement 1 is true: Yes, the Reserve Bank of India (RBI) has the sole authority to issue currency notes in India, excluding one rupee notes and coins, which are issued by the Ministry of Finance. Section 22 of the Reserve Bank of India Act gives the RBI this authority.
Statement 2 is False: The Reserve Bank of India (RBI) replaced the proportional reserve system with the minimum reserve system (MRS) in 1956 to make note issuance more flexible and to meet the economy's growing currency needs.
Hence Statement 1 is correct.
Statement 2 is False: The Reserve Bank of India (RBI) replaced the proportional reserve system with the minimum reserve system (MRS) in 1956 to make note issuance more flexible and to meet the economy's growing currency needs.
Hence Statement 1 is correct.
Most Upvoted Answer
Consider the following statements and identify the right ones1. RBI ha...
Explanation:
Therefore, the correct option is A.
- Statement 1 is correct as per Section 22 of the RBI Act, 1934, RBI has the sole right to issue currency notes except one rupee notes and coins which are issued by the government of India.
- Statement 2 is incorrect as the minimum reserve system has not been replaced by the proportional reserve system. The minimum reserve system requires banks to keep a minimum percentage of their deposits with RBI in the form of cash reserves, while the proportional reserve system requires banks to maintain reserves in proportion to their deposits.
Therefore, the correct option is A.
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Consider the following statements and identify the right ones1. RBI ha...
The correct answer would be 'D' as RBI does not have the sole right to issue currency notes. Re. 1 note is issued by the Ministry of Finance of the Central Government. It is covered under the Coinage Act.
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Consider the following statements and identify the right ones1. RBI has the sole right to issue currency notes2. Minimum reserve system has been replaced by proportional reserve systema)1 onlyb)2 onlyc)1 and 2 bothd)NoneCorrect answer is option 'A'. Can you explain this answer?
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