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Question

Which of the following facilitates the role of RBI in currency management in India?

A Sole right to issue bank notes. Correct Answer Incorrect Answer
B Make recommendations on the design, form and material of bank notes. Correct Answer Incorrect Answer
C To estimate the quantity of bank notes needed. Correct Answer Incorrect Answer
D A, and B. Correct Answer Incorrect Answer
E A, B and C. Correct Answer Incorrect Answer

Solution

In terms of Section 22 of the Act, Reserve Bank has the sole right to issue banknotes in India. Section 25 states that the design, form and material of bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by the Central Board of RBI. The Reserve Bank, in consultation with the Central Government and other stake holders, estimates the quantity of banknotes that are likely to be needed denomination-wise in a year and places indents with the various currency printing presses for supply of banknotes.

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