BANKING AFFAIRS

Detailed explanation-1: -Currency Act, 1871 “ : It extends to the whole of Britisli India; I ocal extent.

Detailed explanation-2: -The paper currency Act of 1861 divested these banks of the right to note issue; the Presidency Banks were, however, given the free use of Government balances and were initially given the right to manage the note issues of Government of India.

Detailed explanation-3: -The Paper Currency Act of 1861 conferred upon Government of India the monopoly of Note Issue bringing to an end note issues of Private and Presidency Banks.

Detailed explanation-4: -An Act to provide for a Government Paper Currency. An Act to enable the Banks of Bengal, Madras and Bombay to enter into arrangements with the Government, for managing the issue, payment and exchange of Government Currency Notes and certain business hitherto transacted by the Government Treasuries.

Detailed explanation-5: -The expansionist strategies of the East India Company led Bengal to a scarcity of gold and silver bullion. Sensing an emerging credit crisis, the British official introduced paper currency in India.