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Question
The Reserve Bank of India issues notes under which one of the following methods?
The Reserve Bank of India issues notes under which one of the following methods?
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Solution
The correct option is C Minimum reserve system
For the issue of currencies, the
RBI follows Minimum Reserve System at present. The Minimum Reserve System (MRS)
is followed from 1956 onwards.
Under the Minimum Reserve System,
the RBI has to keep a minimum reserve of Rs 200 crore comprising of gold coin
and gold bullion and foreign currencies. Out of the total Rs 200 crores, Rs. 115
crore should be in the form of gold coins or gold bullion.
The purpose of
shifting to this system was to expand money supply to meet the needs of increasing
transactions in the economy.
For the issue of currencies, the RBI follows Minimum Reserve System at present. The Minimum Reserve System (MRS) is followed from 1956 onwards.
Under the Minimum Reserve System, the RBI has to keep a minimum reserve of Rs 200 crore comprising of gold coin and gold bullion and foreign currencies. Out of the total Rs 200 crores, Rs. 115 crore should be in the form of gold coins or gold bullion.
The purpose of shifting to this system was to expand money supply to meet the needs of increasing transactions in the economy.
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