CASH – CURRENCY MANAGEMENT :

The currency ( bank notes) of our country is issued by the Reserve Bank of India. The Reserve Bank has the sole right to issue and management of currency in India under Section 22 of the RBI Act. RBI may issue notes of different denominations as decided by the Central Government, based on the recommendations made by the Central Board of the bank from time to time. Such notes should be legal tender at any place in India.

The Reserve Bank handles the currency management function through its Department of Currency Management in Mumbai. The aggregate value of gold coins, bullion and foreign securities held by RBI should not be below the prescribed limit at any time. The Reserve Bank currency management is handled through two departments viz., the Issue Department and the Banking Department. The issue department should ensure that the aggregate value of the currency notes and bank notes in circulation from time to time should be equivalent to the eligible assets( gold coins, bullion and foreign securities) held by RBI.