Foreign currencies purchased by the rbi are kept at banking department whereas the resaves used for issuing new currency under mrs is kept at issue department. The procured foreign currency and government bonds constitute to the assets of the rbi whereas the newly issued currency is its liability. Department of currency management has the responsibility of administering the functions of currency management a core function of the reserve bank in.
It look after the currency notes in circulation and maintains a minimum reserve needed to issue currencies. For the issue of currency notes and its circulation the rbi has the issue department. Rbi regulates commercial banks and non banking finance companies working in india.
The reserve bank of india rbi is india s central bank which controls the issue and supply of the indian rupee rbi is the regulator of the entire banking in india rbi plays an important part in the development strategy of the government of india. The entire issue of currency note is subjected to the regulations framed in the rbi act of 1935. There is a limit to the power of issue department of rbi to issue paper currency.
The present currency note is an inconvertible paper note and the same cannot be issued by the rbi in unlimited amount. Central banking or primary functions of rbi. Modern functions of banks as financial intermediaries.
200 crores there should be other security such as government treasury bills to back the issue of money. But rbi cannot issue any amount of currency as beyond the limit of rs. With the enactment of the reserve bank of india rbi act 1934 on 6th march 1934 effective from 1st april 1935 under section 22 of rbi act rbi was conferred the sole right of issue and management of currency notes not exceeding inr ten thousand denomination currency notes except one rupee notes which are issued by the union ministry of finance but are circulated through rbi.
Initially it used to keep 40 per cent of gold reserves in. The rbi follows a minimum reserve system in the note issue. The reserve bank has the sole right to issue currency notes except one rupee notes which are issued by the ministry of finance.
Rbi as currency issuing authority of india.
Issue of currency by rbi. Reserve bank of india has been authorized to issue notes of rs. In fact as per rbi act rbi can issue any note of any denomination but not exceeding rs. The notes denomination is notified by government and rbi acts accordingly. Signature on currency notes.
The currency department in rbi attends to the core statutory function of note and coin issue and currency management. This involves forecasting the demand for fresh notes and coins placing the indent with four printing presses and mints receiving supplies against those indents and distributing them through the 18 offices of the bank a wide.
This involves forecasting the demand for fresh notes and coins placing the indent with four printing presses and mints receiving supplies against those indents and distributing them through the 18 offices of the bank a wide. The currency department in rbi attends to the core statutory function of note and coin issue and currency management. Signature on currency notes.
The notes denomination is notified by government and rbi acts accordingly. In fact as per rbi act rbi can issue any note of any denomination but not exceeding rs. Reserve bank of india has been authorized to issue notes of rs.
