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Consider the following statements:
  1. The Reserve Bank of India has the powers to declare any series of bank notes of any denomination to be not a legal tender.
  2. The Reserve Bank of India is solely responsible for the designing and minting
  3.  of coins in various denominations.
  4. The Reserve Bank of India determines the inflation target in terms of the Consumer Price Index, once every two years.
 How many of the statements given above are correct?  
  • a)
    Only one  
  • b)
    Only two  
  • c)
    All three  
  • d)
    None 
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Consider the following statements: The Reserve Bank of India has the p...
Statement 1 is incorrect: The design, form and material of bank notes shall be approved by the Central Government on the recommendations of the Central Board of the RBI. Every bank note shall be a legal tender at any place in India, however, on recommendation of the Central Board, the Central Government may declare any series of bank notes of any denomination to be not a legal tender.
Statement 2 is incorrect: In terms of Section 22 of the Act, the Reserve Bank has the sole right to issue banknotes in India. Section 25 states that the design, form and material of bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by the Central Board of RBI. The Government of India is responsible for the designing and minting of coins in various denominations as per the Coinage Act, 2011.
Statement 3 is incorrect:  The RBI Act provides for a statutory basis for the Monetary
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Community Answer
Consider the following statements: The Reserve Bank of India has the p...
The correct answer is option 'D' - None.
Explanation:
- The Reserve Bank of India has the power to declare any series of banknotes of any denomination to be not a legal tender. This statement is true as the RBI has the authority to demonetize any series of banknotes.
- The Reserve Bank of India is not solely responsible for designing and minting coins in various denominations. The responsibility for designing and minting coins lies with the Government of India, specifically the Ministry of Finance.
- The Reserve Bank of India does not determine the inflation target in terms of the Consumer Price Index. The inflation target is set by the Monetary Policy Committee (MPC) of the RBI, not the RBI itself. The MPC reviews the target once every two months, not once every two years.
Therefore, none of the statements given above are correct.
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Consider the following statements: The Reserve Bank of India has the powers to declare any series of bank notes of any denomination to be not a legal tender. The Reserve Bank of India is solely responsible for the designing and minting of coins in various denominations. The Reserve Bank of India determines the inflation target in terms of the Consumer Price Index, once every two years.How many of the statements given above arecorrect? a)Only one b)Only two c)All three d)NoneCorrect answer is option 'D'. Can you explain this answer?
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