BANKING AFFAIRS

Detailed explanation-1: -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.

Detailed explanation-2: -Advantages of Sole Authority of Note Issue with RBI: It helps in ensuring public faith in the currency system. It helps in stabilising internal and external value of currency. It gives power to the central bank in influencing money supply in the economy because it consist of currency with public.

Detailed explanation-3: -The Reserve Bank is the nation’s sole note issuing authority. Along with the Government of India, we are responsible for the design, production and overall management of the nation’s currency, with the goal of ensuring an adequate supply of clean and genuine notes.

Detailed explanation-4: -The Department of Currency Management has the responsibility of administering the functions of currency management, a core function of the Reserve Bank in terms of the Reserve Bank of India Act, 1934. Currency management essentially relates to issue of notes and coins and retrieval of unfit notes from circulation.