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GK MCQs Section
Q. Which defines fiduciary issue of currency notes?
Answer: The portion of notes issued beyond metallic reserves, backed by trust or securities
Notes: Fiduciary issue is the amount of currency notes issued in excess of gold or silver reserves, backed by government securities or public trust. The Bank Charter Act of 1844 introduced the fiduciary system in England, limiting note issue not fully backed by gold. Modern systems such as those used by the Reserve Bank of India also use the fiduciary issue principle.
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