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The Monetary System

Which of the ...

Question

Which of the following systems is followed by the Reserve Bank of India for issuing currency?

A

Proportionate system

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B

Simple deposit system

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C

Minimum reserve system

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D

Fixed fiduciary issue system

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Solution

The correct option is C
Minimum reserve system

The RBI follows the minimum reserve system, wherein it has to maintain a minimum quantity of gold bullion as reserves to issue currency.

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