BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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approved assets
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gold
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foreign exchange
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trustee securities
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Detailed explanation-1: -Notes in circulation and Notes held in the Banking Department both items are liabilities of Issue Department.
Detailed explanation-2: -As per the RBI Act, the only liability of the Issue Department is ‘Notes in Circulation’. The assets of the Issue Department comprise broadly, gold coins and bullion, rupee coins, rupee securities and foreign securities.
Detailed explanation-3: -All banknotes issued by RBI are backed by assets such as gold, Government Securities and Foreign Currency Assets, as defined in Section 33 of RBI Act, 1934.
Detailed explanation-4: -The RBI issues currency note under the fixed minimum reserve system. RBI is required to maintain reserves of Rs 200 crores which includes Rs 115 crores as gold reserve and the remaining in foreign currency. This is called minimum reserve system.