Question

Which Banks do not have the authority to issue the currency notes in India ?

• A. Commercial Banks
• B. Reserve Bank of India
• C. Private Banks
  (D) Both (a) and (c)
• D.

Hint:

Only one "Central Bank" exists per country with the power to issue currency. All other banks are "Commercial" and only deal with money circulation.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
Currency issuance is a sovereign function, usually delegated to a single authority to ensure stability and uniformity in the economy.
Step 2: Detailed Explanation:
1. In India, the Reserve Bank of India (RBI) has the "Monopoly of Note Issue". It is the only bank authorized to print and issue currency notes (except the one-rupee note).
2. Commercial Banks (whether state-owned like SBI or private like HDFC) do not have the legal right to print money. Their role is to accept deposits and create credit.
3. Private Banks are a subset of commercial banks and likewise lack this authority.
Step 3: Final Answer:
Neither Commercial Banks nor Private Banks can issue currency notes; only the Central Bank (RBI) can.