Question

Which of the following is NOT a permissible reserve asset under Section 33 of the RBI Act?

• A. Gold bullion
• B. Foreign securities
• C. Equity shares
• D. Government of India securities

Answer 1

Answer:

C. Equity shares

Section 33 of the RBI Act, 1934 specifies the permissible assets that RBI can hold as reserves to back its currency issuance. Permissible reserve assets include: Gold bullion Foreign securities Government of India securities Equity shares are not allowed as reserve assets because they are risky and volatile, unlike the above stable assets.