ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -1. Issue of Currency Notes: The RBI has the sole right or authority or monopoly of issuing currency notes except one rupee note and coins of smaller denomination. These currency notes are legal tender issued by the RBI.

Detailed explanation-2: -Central bank has monopoly rights of issuing notes of all denominations. This is called currency authority function of central banks. All notes issued by central bank acts as an unlimited legal tender in the country.

Detailed explanation-3: -A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base.

Detailed explanation-4: -The central bank has the sole monopoly to issue currency notes. Currency notes and coins issued by the central bank are the legal tender money. Legal tender money is one which every individual is bound to accept by law in exchange of goods and services.

Detailed explanation-5: -Central bank has the monopoly rights of issuing notes which is called currency authority function of central banks. All notes issued by central bank are an unlimited legal tender in the country.