Q. Which of the following system is maintained by Reserve Bank of India against printing of notes?
Answer: Minimum Reserve System
Notes: Originally, the assets of the Issue department were to consist of not less than 2/5
th of the Gold or sterling securities, provided Gold was NOT less than Rs. 40 Crores in value. Remaining 3/5
th 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.
