Q. Consider the following statements:

1. In India, the Reserve Bank of India issues currency notes on behalf of the central government.
2. Use of rupee as a medium of payment cannot be refused in settling transactions in India.

Which of the above is / are correct?
Answer: Both 1 and 2
Notes: Both are correct statements. In India, the Reserve Bank of India issues currency notes on behalf of the central government. As per Indian law, no other individual or organisation is allowed to issue currency. Moreover, the law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India. No individual in India can legally refuse a payment made in rupees. Hence, the rupee is widely accepted as a medium of exchange.