All Government Jobs Are you willing to know the detailed information about the RBI Functions-Currency Administrations? Here is the article which provides you the clean and clear information about the RBI Functions-Currency Administrations. The Reserve Bank of India is India's Central Banking and Monetary Authority. RBI regulates loans which are offered by banks and Non-banking financial institutions to government entities, businesses, and Consumers and Controls the availability of funds in the financial system for Credit.
How Currency is Issues in India?
In India, the Paper Currency was First issued during British East Indian Company Rule. The first Paper Currency issued in India was the Re. 1 Note. It was issued by the Private Banks Such as Bank of Hindustan and the Presidency banks during the late 18th Century. In those times, there was Government issued notes also but the government had no MOnopoly in Issuing Paper Notes.
Such as the Paper Currency Act of 1861, the British Government of India was Conferred as the Monopoly to issue Paper Notes in India.
Currency Circles:-
After the 1861 Act, The Government of India had the Monopoly to issue paper Notes in India. But since making those notes popular was a difficult task in such a vast country; The Government Entered into agreements with the Presidency Banks to work as Authorized Agents to promote circulations of the paper notes across the length and breadth of British India.
Even though there were several limitations, with the lack of Mobility and Lack of development and also lack Education which is resulted in a major issue in the redemption of these notes. Consequently, there were only some areas in various parts of the country where the paper notes of the Indian Government were Legal Tenders.
Controller of Currency:-
The agreements with the Presidency Banks to promote and popularize the bank notes was terminated in 1867. Subsequently, the job of promoting, circulating and redemption of the currency notes was entrusted to Mint Masters, Accountant General and the Controller of Currency. This practice continued till RBI came to Existence in 1935.
Later under section 22 of the RBI Act in the year of 1934, it provided that RBI has the Sole right to issue Bank Notes of all Denominations. Thus, On 01-Apr-1935, the currency functions moved from the controller of Currency to RBI. Today Reserve Bank is responsible for the design, production and Overall Management of the Nations Currency, with the goal of ensuring an adequate supply of clean and genuine notes.
Decimalization of Coinage:-
India changed from the rupee, Anna, pie system to decimal currency on 1 April 1957. Yemen Arab Republic introduced coinage system of 1 North Yemeni rial=100 fils in 1974, to replace former system of 1 rial = 40 buqsha = 80 halala = 160 zalat. The country was one of the last to convert its coinage.
Role of RBI in Coins in India:-
The distribution of Coins is undertaken by RBI as an agent of the Government. However, RBI is the only source of Legal Tender Money because of the distribution of One rupee notes and coins and Small Coins all over the country which is undertaken by the Reserve Bank as an agent of the Government.
Currency Paper Notes in Circulation:-
At present, paper currency notes in India are issued in the denomination of Rs. 5, Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1,000. The printing of Rs, 1 and Rs. 2 denominations has been discontinued, though the notes in circulation are valid as per the Coinage Act 2011.
- In February 2015, it was reported that RBI will again put in circulation rupee one notes after a gap of 20 years.
Reserve Bank of India has been authorized to issue notes of Rs. 5000 and Rs. 10,000 also. In fact, as per the RBI Act, it can issue any note of any denominations but Not Exceeding 10,000. The NOtes denomination is notified by Government and RBI acts accordingly.
Signature on Currency Notes:-
Under Section 22 of the Reserve Bank of India Act, RBI has Sole right to issue currency notes of Various denominations except one rupee notes. The one Rupee Note is issued by Ministry of Finance and it bears the signature of Finance secretary, while other notes bear the signature of Governor RBI.
Proportional Reserve system and Minimum Reserve System:-
Originally, the assets of the issue department were to consist of not less than 2/5th of the Gold or Sterling securities, Provided Gold not less than Rs. 40 Crores in value. Remaining 3/5th of the assets might be rupee coins. This was Called "proportional Reserve System". In 1956, this system changed. Now, RBI is required to maintain a Gold and Foreign Exchange Reserves of Rs. 200 Crore of which at least Rs. 115 crore should be in Gold. This is called the Minimum Reserve System. This system continues to date.
Currency Chests:-
Currency Chests are Storehouses where bank notes and Rupee coins are Stocked on behalf of the Reserve Bank. The Currency chests have been established with state bank of India, Six associate Banks, Nationalized banks, Private Sector Banks, a Foreign Bank, a State Cooperative Bank, and a regional Bank.
First Printing Press in India for Bank Notes:-
Currency Note Press (CNP), Nasik, Maharashtra was established in 1928. It was the first printing press for bank notes in India.
Legal Tenders:-
One Rupee Note and One Rupee coins are legal tenders for unlimited amounts. 50 paisa coins are legal tender for any sum not above Rs.10. The coins of Smaller than 50 paisa value are legal tenders of a sum below Rs.1.
State Series Notes:-
The Star series notes are currently issued in Rs. 10, 20, 50 and Rs. 100. These notes are issued to replace the defected printed notes at the printing press. They have an additional Character of a star and the bundles are NOT in Series. Rest all the features are the same.
Languages on Currency Notes:-
The amount of a banknote is written on it in 17 languages out of 22 official languages of India. The languages are Assamese, Bengali, Gujarati, Kannada, Kashmiri, Konkani, Malayalam, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Tamil, Telugu and Urdu.
Issue Department and Currency Departments of RBI:-
RBI has a Sepearte department called Issue Department whose assets and liabilities are kept separate from the Banking Department. Currency Management Function of Reserve Bank is Carried out at the Department of Currency Management" which is located at Central Office Mumbai. There are 19 issue offices, RBI authorizes selected branches of banks to establish currency chests and coin deposits. At present, there is a Network of 4281 currency chests and 4044 small coin Deposits.
