Question
Under Section 23 of the RBI Act, 1934, the issue of bank
notes is conducted by the Bank in which department, kept wholly distinct from the Banking Department?Solution
Section 23(1) provides that the issue of bank notes shall be conducted by the Bank in an Issue Department, which shall be separated and kept wholly distinct from the Banking Department. The assets of the Issue Department shall not be subject to any liability other than the liabilities of the Issue Department as defined in Section 34. Under Section 23(2), the Issue Department shall not issue notes except in exchange for other notes, coin, bullion or permitted securities. The correct department is the Issue Department.
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