Explain the ‘Bank of Issue’ function of central bank.

1.	Explain the ‘Bank of Issue’ function of central bank.
Answer» The central bank has sole authority for the issue of currency in the country. All the currency notes (2, 5,10, 20, 50, 100, 500, and 1000) are issued by the RBI. One rupee note and all coins are issued by the govt. of India. But the responsibility for putting them in circulation rest with the RBI. All the currency issued by the central bank is its monetary liability. Putting and withdrawing currency into and from circulation is also the job of the central bank.

Answer»

The central bank has sole authority for the issue of currency in the country. All the currency notes (2, 5,10, 20, 50, 100, 500, and 1000) are issued by the RBI. One rupee note and all coins are issued by the govt. of India. But the responsibility for putting them in circulation rest with the RBI.

All the currency issued by the central bank is its monetary liability.

Putting and withdrawing currency into and from circulation is also the job of the central bank.

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Explain the ‘Bank of Issue’ function of central bank.

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