ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In India, one cannot refuse a payment made in rupees because, by law, the Reserve Bank of India (RBI) issues currency notes on behalf of the central government. The law legalizes the use of rupee as a medium of payment which cannot be refused in settling transactions in India.

Detailed explanation-2: -The Reserve Bank has the sole authority to issue banknotes in India. Reserve Bank, like other central banks the world over, changes the design of banknotes from time to time.

Detailed explanation-3: -Payments in rupees are allowed only for some neighbouring countries, like Nepal and Bhutan. Indian companies usually pay for imports in foreign currencies, while exporters get paid in foreign currency and convert into rupees in most cases.

Detailed explanation-4: -One cannot refuse a payment made in rupees because it is accepted as a medium of exchange. The currency is authorized by the Government of India.