BANKING AFFAIRS

Detailed explanation-1: -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.

Detailed explanation-2: -(1) Primary objects: Preamble to the RBI Act, 1934 spells out the objectives of the RBI as: (a) To regulate the issue of bank notes. (b) To keep reserves with a view to securing monetary stability in India. (c) To operate currency and credit system of the country to its advantage.

Detailed explanation-3: -Section 21 states that the RBI must conduct banking affairs for the central government and manage public debt. Section 22 states that only the RBI has the exclusive rights to issue currency notes in India. Section 24 states that the maximum denomination a note can be is ₹10, 000 (US$130).

Detailed explanation-4: -The mechanism of putting currency into circulation and its withdrawal from circulation (i.e., expansion and contraction of currency, respectively) is effected through the Banking Department.

Detailed explanation-5: -Under the Reserve Bank of India, Act, 1934 (RBI Act, 1934) (as amended in 2016), RBI is entrusted with the responsibility of conducting monetary policy in India with the primary objective of maintaining price stability while keeping in mind the objective of growth.