New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    Which Act will be amended to issue the digital currency?

    A RBI Act 1934 Correct Answer Incorrect Answer
    B Banking Regulation Act 1949 Correct Answer Incorrect Answer
    C Companies Act 2013 Correct Answer Incorrect Answer
    D SEBI Act 1992 Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    RBI Act 1934, will be amended to enable it to issue the digital currency.   Although Central Bank Digital Currency (CBDC) are conceptually no different from banknotes, introduction of CBDC would require an enabling legal framework since the current legal provisions are made keeping in mind currency in paper form. Under the Reserve Bank of India Act, 1934, the Bank is empowered to “…regulate the issue of bank notes and the keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage” (Preamble). The Reserve Bank derives the necessary statutory powers from various sections of the RBI Act – with respect to denomination (Section 24), form of banknotes (Section 25), status as legal tender (Sec 26(1)) etc  

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