GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In India, Fixed Fiduciary System of note issue was in force from____
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1816 to 1920
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1890 to 1950
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1920 to 1947
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1947 to 1954
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Explanation:
Detailed explanation-1: -The RBI follows the minimum reserve system, wherein it has to maintain a minimum quantity of gold bullion as reserves to issue currency.
Detailed explanation-2: -The methods for note issuing are simple deposit system, maximum fiduciary system, minimum reserve system, proportional reserve system and fixed fiduciary system.
Detailed explanation-3: -Under the minimum fiduciary system, the minimum reserves of gold against note issue that the authority is required to maintain are fixed by law. Against these minimum reserves, the monetary authority can issue as much paper currency as is considered necessary for the economy.
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