BANKING AFFAIRS

Detailed explanation-1: -Table of Content. For currency issuance, the RBI presently employs the Minimum Reserve System. It was first used in 1956. The RBI is required by the Minimum Reserve System to keep a minimum reserve of an amount of about Rs 200 crores in foreign currency, gold bullion & gold coins.

Detailed explanation-2: -Printing of currency notes in India is done on the basis of Minimum Reserve System (MRS). This system is applicable in India since 1956.

Detailed explanation-3: -Under the Minimum Reserve System(MRS), the RBI has to keep a minimum reserve of Rs 200 crore comprising of gold coin and gold bullion, and foreign currencies for note-issuing.

Detailed explanation-4: -In terms of Section 22 of the Act, 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.

Detailed explanation-5: -The Government of India is the issuing authority of coins and supplies coins to the Reserve Bank on demand. The Reserve Bank puts the coins into circulation on behalf of the Central Government.