DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name Staff Member : P. BADARI NARAYANA
Designation : Sr. Lecturer
Branch : DCCP
Institute : Govt. Polytechnic, NELLORE
Year/Semester : VI Semester
Subject : BANKING-II
Sub. Code : CCP-604(B)
Topic : Reserve Bank - Functions
Duration : 50 Mts.
Sub Topic : Currency regulation function of
RBI.
Teaching Aids : PPT Presentations
CCP604(B).38 1
Objective
On completion of this period, you would
be able to:
 comprehend the currency regulation
function of RBI.

CCP604(B).38 2
Recap :
 In the last lesson we have seen the
 definition of Central Bank
 various functions of RBI.
 evolution of RBI

CCP604(B).38 3
Introduction :
 Today we will see the the function of RBI
as a Regulatory authority of Currency of
the country.

CCP604(B).38 4
 Overview:

 The issue of currency notes is one of the basic

functions of RBI.
 As per the Reserve Bank of India Act, the RBI has the
sole right for the issue of the currency other than one
rupee coins, one rupee notes and subsidiary coins,
which are is used by the ministry of finance
 The note issuing function will be carried out depending
on reserves in the form of gold and bullion, foreign
securities
CCP604(B).38 5
Note issuing authority

 The RBI has the right to issue and withdraw from

circulation of currency notes in the country.
 The RBI can exchange the notes and coins in to
other denominations of notes and coins, as may be
required by the public.
 RBI maintains the quality of notes, by withdrawing
the spoiled notes, defaced notes etc. from
circulation.

CCP604(B).38 6
 Note issuing authority…

 The currency requirements at various places are met

through the currency chests maintained by the RBI with
State Bank of India and it’s associate banks, the
Government Treasuries and Sub-treasuries.
 Currency chests are repositories of new and re-issuable
notes and rupee coins. Unusable notes also preserved
in the currency chests. These are kept back by the
Bank as reserves.

CCP604(B).38 7
Summary

 To day we have seen the notes issuing

function of RBI.
 The regulation of currency is basic function of
RBI.
 It regulates the flow of currency in the country
depending on the gold reserves, bullion, and
the productivity etc.

CCP604(B).38 8
Quiz

1.One rupee note is used by RBI

a) true
b) false

CCP604(B).38 9
 Quiz

2. The bank has right to issued and withdraw from

circular of currency notes in the country
a) SBI
b) SBH
c) RBI
d) AB

CCP604(B).38 10
Frequently asked questions
 What is main function of RBI?
 Why note issuing function is the monopoly of
RBI?
 How does the RBI regulates the currency in the
country?
 How does the RBI maintains its currency
reserves at various places?

CCP604(B).38 11