In India, the one rupee note and all coins are issued by which authority?
- A.Reserve Bank of India
- B.Government of India
- C.State Bank of India
- D.Security Printing and Minting Corporation alone
Correct answer
Explanation
The correct answer is B, the Government of India. The Reserve Bank has the sole right to issue currency notes in India, but the one rupee note and every coin are issued by the Government through the Ministry of Finance. The Reserve Bank is the agent that distributes them, which is the distinction between issuing and circulating that examiners like to test.
Option A is what most candidates choose, because the Reserve Bank issues notes of every other denomination and puts the coins into circulation as well. Option C, the State Bank of India, is an ordinary commercial bank in this respect and issues no currency. Option D names the company that mints the coins and prints notes at the Government's order; a printer is not the issuing authority. Two more points from the same area: the Reserve Bank follows the minimum reserve system for note issue, and the coins are minted under the Coinage Act.
Read the full article: Types of Banks in India: Classification, Functions and MCQs
Practice Questions
View allWhat is the primary function of a commercial bank?
- A.Issuing currency notes and coins
- B.Conducting monetary policy
- C.Granting loans and accepting deposits
- D.Regulating the money supply
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A commercial bank exists to gather savings from those who have a surplus and lend them to those who need funds, and it earns from the gap between the interest it pays depositors and the interest it charges borrowers.
Read the full explanation →Which among the following is a public sector bank?
- A.Axis Bank
- B.ICICI Bank
- C.Bank of Baroda
- D.Yes Bank
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It was founded in 1908 by Maharaja Sayajirao Gaekwad III, nationalised in the first round of July 1969, and the Government of India still holds the majority of its shares, which is what makes a bank a public sector bank.
Read the full explanation →SEWA (Self-Employed Women's Association) Bank, a cooperative bank in Gujarat, was launched in India in ______.
- A.1974
- B.1894
- C.1994
- D.1874
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Women of the Self-Employed Women's Association at Ahmedabad, who worked as vendors, headloaders and home-based workers, pooled their own share capital and registered a cooperative bank of their own in 1974 because ordinary banks would not deal with borrowers who had no collateral and no paperwork.
Read the full explanation →Which of the following functions of Reserve Bank of India are correct? I. Banker to Banks II. Currency Issuer
- A.Only I
- B.Neither I nor II
- C.Both I and II
- D.Only II
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The Reserve Bank is banker to banks: every scheduled bank keeps an account with it, holds its cash reserve ratio there, settles payments with other banks through those accounts and can borrow from it when short of funds.
Read the full explanation →Scheduled banks in India are those banks which are included in which schedule of which Act?
- A.First Schedule of the Banking Regulation Act, 1949
- B.Second Schedule of the Reserve Bank of India Act, 1934
- C.Second Schedule of the Banking Regulation Act, 1949
- D.Seventh Schedule of the Constitution
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A bank is placed in that Schedule once it has the prescribed paid-up capital and reserves and satisfies the Reserve Bank that its affairs are not conducted in a manner harmful to depositors.
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