What is the highest denomination of banknote that can be issued under the Reserve Bank of India Act, 1934 without amending it?
- A.Rupees two thousand
- B.Rupees five thousand
- C.Rupees ten thousand
- D.Rupees one lakh
Correct answer
Explanation
The correct answer is C, rupees ten thousand. Section 24 of the Reserve Bank of India Act, 1934 permits banknotes of denominations up to ten thousand rupees, so a note of a higher value would need an amendment of the Act by Parliament. Option A, two thousand rupees, is the denomination introduced after the demonetisation of 2016 and withdrawn from circulation in May 2023, which makes it a tempting but wrong answer, since the question asks for the legal ceiling and not the highest note in use. Option B, five thousand rupees, names a denomination India actually had in the past, since notes of one thousand, five thousand and ten thousand rupees circulated before 1946 and again between 1954 and 1978, but it is lower than the ceiling the Act allows and so is not the answer. Option D, one lakh rupees, has never been a banknote and exceeds the statutory limit.
Read the full article: Indian Currency: Notes, Coins, Mints and Demonetisation
Practice Questions
View allUnder which section of the Reserve Bank of India Act, 1934 does the Reserve Bank have the sole right to issue banknotes?
- A.Section 17
- B.Section 22
- C.Section 42
- D.Section 49
Show answer
Section 22 of the Reserve Bank of India Act, 1934 confers on the Reserve Bank the sole right to issue banknotes in India, and the Issue Department of the Bank keeps this function separate from its banking business.
Read the full explanation →Which currency note in India is issued by the Government of India and not by the Reserve Bank of India?
- A.One rupee note
- B.Two rupee note
- C.Five rupee note
- D.Ten rupee note
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The one rupee note is issued by the Government of India under the Coinage Act and carries the signature of the Finance Secretary, while every other denomination is a banknote issued by the Reserve Bank under Section 22 of its Act and carries the signature of the Governor.
Read the full explanation →Since which year has the note issue of the Reserve Bank of India been governed by the Minimum Reserve System?
- A.1935
- B.1949
- C.1956
- D.1969
Show answer
An amendment of the Reserve Bank of India Act in 1956 replaced the proportional reserve system with the Minimum Reserve System, under which the Bank must hold assets worth two hundred crore rupees against the note issue, of which gold must be not less than one hundred fifteen crore rupees…
Read the full explanation →A star below the year of minting on an Indian coin indicates which mint?
- A.Mumbai
- B.Hyderabad
- C.Noida
- D.Kolkata
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The mint of an Indian coin can be read from the small mark placed below the year of minting, and a five-pointed star stands for the Hyderabad mint.
Read the full explanation →The banknote presses at Mysuru and Salboni are run by Bharatiya Reserve Bank Note Mudran Private Limited, a subsidiary of which institution?
- A.Reserve Bank of India
- B.State Bank of India
- C.Ministry of Finance
- D.Security Printing and Minting Corporation of India
Show answer
Bharatiya Reserve Bank Note Mudran Private Limited was set up in 1995 as a wholly owned subsidiary of the Reserve Bank and runs the two banknote presses at Mysuru in Karnataka and Salboni in West Bengal.
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