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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 was NOT less than Rs. 40 Crores in value. Remaining 3/5th of the assets might be rupee coins. This was called Proportional Reserve System. The system changed in 1956. Since then, 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 Minimum Reserve System. This system continues till date.


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Comments

  • Knowledge is Peace.

    In 1994 the Minimum Reserve Requirements were
    increased to 515 crores against which currencies
    worth Rs. 10000 were issued. The breakup of it is
    as follows:-
    1. International Bonds, securities and currencies
    worth Rs. 400 crores
    2. Gold reserves worth Rs. 115 crores.

    • Aspirant

      Thanks for the update

  • ravikumarShinde

    hello by friend actually u give the correct information only the date is wrong the ueear is 1956 capital of 515 cr and from 31oct,1957 rbi dedicated the capital to 200 cr