Question

The sole right of issuing paper currency notes, except for one rupee notes and coins is vested with

• A. Ministry of Finance
• B. National Bank for Agriculture and Rural Development (NABARD)
• C. RBI
• D. State Bank of India (SBI)

Answer 1

Answer:

C. RBI

Issue of currency notes:

• Central Bank has the sole authority for issue of currency in the country in India.
• RBI has the sole right of issuing paper currency notes (except one rupee notes and coins, which are issued by the Ministry of Finance).
• The reason for this is that it brings about uniformity in note circulation and gives the Central Bank direct control over the money supply, it promotes efficiency in the financial system.