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August 31, 2012 at 4:34 pm #67841
Q. What is Currency?
A. Currency means coins and notes. Notes below the denomination of two rupees and other coins are legal tender under the Indian Coinage Act, 1906. Notes of two rupees and upward are legal tender issued by the Reserve Bank of India with effect from April, 1935 as per the R.B.I. Act 1934.August 31, 2012 at 4:35 pm #73884
Q. What is Resource?
A. Resource means—
(a) Coins and Notes i.e. legal tender issued by the R.B.I.
(b) Taxes collected by the Union/the States are considered financial resources of the Union/the States.August 31, 2012 at 4:38 pm #73886
Q. Who controls the resources and how the resource operation and remittances are made?
“The control of the resource operations of the Govt, of India and the States is vested with the R.B.I.” — How the work is conducted?
(a) The Reserve Bank of India controls the resource operation of the Govt, of India and States. The work is conducted by the Currency Officer of the Reserve Bank. The Govt. of India has made an agreement with the R.B.I. that general banking business of the Govt. i.e. Receipts, Collections, Payments, Remittance of moneys on behalf of the Govt. of India will be carried on as per the R.B.I. Act, 1934 and also in accordance with subject to such order as may from time to time be given to the R.B.I. by the Govt. Similar agreements were made with the R.B.I. by the State Governments. The R.B.I. Nagpur also acts as a general clearance house for final settlement of accounts of the states. Only Loans/Grants from the Central Govt. to State Govt. and repayment of loan are made through R.B.I. Nagpur.
(b) The control of Resource operation of the Govt. of India and the States vest in the Reserve Bank of India. The said work is conducted by the Currency Officer incharge of issuing department of Reserve Bank.
(i) Cash balance of each Govt. is always sufficient with R.B.I.
(ii) The cash balances are always sufficient at its Treasuries and Sub-Treasuries situated at places where cash business is not conducted by R.B.I. and it’s branches and agencies.
(iii) The places where the cash business is conducted by the bank it is the duty of Currency Officer of R.B.I. to see that the cash balances of the bank are always sufficient to meet the local demands.
(iv) At Treasuries / Sub-Treasuries situated at places where there is no branch and agency of the bank. Govt. holds the Treasury Officer responsible for keeping sufficient funds to meet the local demands and for maintaining the balances as low as possible in order that money may not be locked up unnecessarily.
(v) The Currency Officer of R.B.I. is responsible for distribution of fund within their jurisdiction. It is duty of the Currency Officer to keep all the treasuries adequately supplied of notes and coins and arrange for the transfer of funds between treasuries and banks either by actual remittance of notes and coins or by transfer through currency chests.September 3, 2012 at 12:09 pm #73947
Q. “The transfer of funds between Treasuries and Sub-Treasuries and branches and agencies of R.B.I. is effected for the most part through the medium of currency chests belonging to the R.B.I.”—Discuss.
The following procedures are maintained:
(a) Currency chests are maintained at non-banking treasuries and subtreasuries to prevent unnecessary locking of funds in treasury balances and to facilitate to transfer of funds from and to such balances.
(b) As per R.B.I. Act. the amount of currency and bank notes in circulation is the constitued liabilites of the issuing department of R.B.I. and as such the said liabilites should not exceed the assets of issuing departments of R.B.I. held in gold, sterling securities including rupees and coins securities. A portion of these assets is kept in various currency chests in the form of rupees and coins which are not in circulation. The same will increase the assets of issuing department of R.B.I.
(c) The amount deposited in the currency chest thus enables the bank to issue notes elsewhere upto the amount deposited in the currency chest without increasing the total amount of notes in circulation.
(d) The said notes and coins of currency chest are not in circulation but pass into circulation only when the same are transferred to treasury balances.
(e) It also prevents the necessity for frequent remittances of notes and coins as surplus funds can be deposited into currency chest for use elsewhere.
(f) It is the duty of currency officer of R.B.I. to keep all treasuries and banks adequately supply of all kinds of coins and notes and to arrange to transfer of funds between treasuries and the Banks.September 3, 2012 at 12:15 pm #73948
Q. “The Reserve Bank of India provides facilities to the Public for remittance of moneys from one place to another”—Discuss
The facilities to the Public for remittance of moneys are made as under:—
(a) These remittance are arranged for by issue of Telegraphic transfer or by Reserve Bank Draft, where R.B.I. has its own offices or its agencies.
(b) Where there is no office of R.B.I. or branches of the State Bank similar facilities are provided to the public. Remittance of moneys are made by Telegraphic transfer and R.B.I. draft issued by treasuries acting as treasury agencies of R.B.I. for this purpose.
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