Currency in India: Banking Awareness Study Notes

Banking Awareness is considered to be the high scoring section in any competitive exam. It includes two main portions, current affairs GK and static GK. In this article, we will discuss some really important Banking Awareness topics that are covered in almost all competitive exams. Also, you can download the PDF of lists of different Banking Awareness topics.

 In Banking Section, the questions are asked from following topics: History of Banking, banking terms, Marketing of Banking Products, Functions of Banks, Banks and their taglines, schemes, committees related to banking, headquarters of bank, some Banking news related, apps launched by banks, new schemes etc. 

In a series of sharing useful study material for upcoming banking exams. Here, we are providing Banking Awareness notes for all banking Exams (IBPS, SBI & Other Banking Exams).

Banking Awareness Study Notes on Currency in India

Currency Basics

Coins – Coins in India are presently being issued in denominations of one rupee, two rupees, five rupees and ten rupees. Coins in the denomination of 1 Paise, 2 Paise, 3 Paise, 5 Paise, 10 Paise, 20 Paise and 25 Paise have been withdrawn from circulation with effect from June 30, 2011 and are, therefore, no more legal tender.

Currency – Banknotes in India are currently being issued in the denomination of Rs 10, Rs 20, Rs 50, Rs 100, Rs 200, Rs 500 and Rs 2000. These notes are called banknotes as they are issued by the Reserve Bank of India (Reserve Bank). The printing of notes in the denominations of Rs 2 and Rs 5 has been discontinued as these denominations have been coinised.  Government of India vide their Notification no. 2652 dated November 8, 2016 have withdrawn the Legal Tender status of Rs 500 and Rs 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank of India till November 8, 2016. Currency paper is composed of cotton and cotton rag.

The highest denomination note ever printed by the Reserve Bank of India was the ₹ 10000 note in 1938 and again in 1954. These notes were demonetized in 1946 and again in 1978.

What is the Indian currency called?

The Indian currency is called the Indian Rupee (INR) and the coins are called paise. One Rupee consists of 100 paise. The symbol of the Indian Rupee is ₹ . The design resembles both the Devanagari letter “₹” (ra) and the Latin capital letter “R”, with a double horizontal line at the top.

Who Issues Indian Currency?

Under Section 22 of the RBI Act 1934, The Reserve Bank of India is solely responsible for managing currency in India, except One Rupee Note which is issued by Union Ministry of Finance but circulated by RBI.

RBI is responsible for its designing, production and overall management of the nation’s currency, with the objective of ensuring an adequate supply of clean and genuine notes.

RBI is also responsible to enhance security features to reduce the risk of counterfeiting or forgery of the currency notes.

The Central government approves the design of banknotes on the recommendation of the central board of the Reserve Bank of India.

Where are the currency printed?

Four printing presses print and supply banknotes. These are at Dewas in Madhya Pradesh, Nasik in Maharashtra, Mysore in Karnataka, and Salboni in West Bengal.

Banks note get legal tender as per section 26 of RBI Act.

About Coins

 The Government of India is the issuing authority of coins and supplies coins to the Reserve Bank on demand. The Reserve Bank puts the coins into circulation on behalf of the Central Government.

Minting of Coins

Coins are minted by the Government of India. The Reserve Bank is the agent of the Government for distribution, issue and handling of coins. Four mints are in operation: Mumbai in Maharashtra, Noida in Uttar Pradesh, Kolkata, and Hyderabad.

Issue and distribution of coins

 (THE COINAGE ACT, 2011): The distribution of Coins is undertaken by RBI as an agent of the Government, (coins are minted by the Government and not by RBI).

Coins up to 50 paisa are called “small coins” and coins of Rupee one and above are called “Rupee coins“. The Coinage Act 2011 is also applicable on the one rupee note of GOI.

Coins can be issued up to the denomination of Rs.1000 as per the Coinage Act, 1906.

“commemorative coin” means any coin stamped by the Government or any other authority empowered by the Government in this behalf to commemorate any specific occasion or event and expressed in Indian currency;

Coins in circulation

 50 paise, 1, 2, 5 and 10 Rupee

Following rules (legal tender of coins) are mentioned in The Coinage Act 2011 (Earlier The Coinage Act 1906):

• Coins of denomination of Re 1 and above can be used for payment of maximum Rs. 1,000.
• 50 paisa coin can be used for payment of maximum Rs 10.

Demonitisation

Till now demonitisation of bank notes have taken 3 times in India of which 2 came after Indpendance.

RBI can withdraw the legal tender character of bank notes as per Section 26(2) of RBI Act, 1934.