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KNOW YOUR CURRENCY

Chapter Outline 1.0 Introduction 1.1 Learning Objectives 1.2 History of Indian Coins and Currency 1.2.1 Denomination of banknotes and coins issued in India 1.2.2 Issuer of banknotes and coins 1.3 Importance of "Legal Tender" 1.3.1 Promissoiry Clause 1.4 Currency Management 1.4.1 Role of Reserve Bank of India 1.4.2 Role of Government of India 1.4.3 Decision regarding volume and value of banknotes to be printed 1.4.4 Circulation of banknotes and coins 1.4.5 Role of Currency Chests and Coin Depots 1.5 Soiled and Muitilated Bank Notes 1.5.1 Exchange of Soiled and Mutilated Notes 1.6 Counterfeit and Forged Notes 1.6.1 Security Features in banknotes

1.7 Clean Note Policy 1.8 Let us sum up 1.9. Glossary/Keywords 1.10 Refernce and Further readings 1.11 Answer to Self Assessment Questions

Introduction

You know that money is defined as anything that is generally accepted as payment for goods and services and repayment of debts. The main uses of money for us are as a medium of exchange, a unit of account, and a store of value. You may find that money as a means of payment consists of coins, paper money and withdrawable bank deposits by cheques and withdrawal slips. Today, you have credit cards, debit cards, electronic cash and mobile banking , which also form an important component of the payment system but for a common person like us , money simply means currency and coins. This is so because in India, the payment system, especially for retail transactions still revolves mainly around currency and coins. We know that the Indian currency is called the Indian Rupee (INR) and the coins are called paise. One Rupee consists of 100 paise.

Learning Objectives
After reading this chapter, you are expected to be able to:

y

Describe the history of Indian currency and coins;

They were isuued by different states under various kings: .2 History of Indian Coins and Currency I. Others You can see some ancient coins below. and Preach and practice a clean neat policy. Medival c. Distinguish between genuine and counterfeit banknote. Ancient b. which were in circulation in our provincial states. British India f. Coins It would be interesting for us to know that the first documented coinage seems to have started with 'Punch Marked' coins issued between the 7th-6th Century BC and 1st Century AD. Discuss issues related to currency management. Mughal d. Late pre-colonial e. 1. You can classsify the coin age into the following periods: a. Republic India g.y y y y Explain legal tender.

which of course have undergone changes over a period of time: .Now you see the modern day coins here.

The Paper Currency Act of 1861 conferred upon Government of India the monopoly of Note Issue bringing to end banknote issues of Private and . Our coins can be issued up to the denomination of Rs.1000 as per the Coinage Act. During the period of transition India retained the monetary system and the currency and coinage of the earlier period. 1906. II. Our paper money. 1950. in the modern sense. one rupee. Coins upto 50 paise are called 'small coins' and coins of Rupee one and above are called 'Rupee Coins'. India brought out its distinctive coins on 15th August. 1947. Our coins are presently being issued in denominations of 25 paise. Currency Our financial instruments and 'Hundies' in India have a venerable history. traces its origins to the late eighteenth century with the issues of private banks as well as those of semi-government banks. two rupees and five rupees. 50 paise.Our country won its independence on August 15.

10 in February. You can have a look below at the modern day currency notes.Presidency Banks. 100 in March and Rs.100. The George VI series continued till 1947 and thereafter as a frozen series till 1950 when post independence banknotes were issued. Reserve Bank issued banknotes in January 1938 when the first Five Rupee banknote was issued bearing the portrait of George VI. Rs. 10.500 and Rs. Rs. 1. The following are some old Indian currency notes: . Rs. Our banknotes in the Mahatma Gandhi Series were introduced in 1996 and were issued in a phased manner in the denominations of Rs. with the Ashoka Pillar watermark.5. This was followed by Rs.1000. Rs. 1935.10.000 in June 1938. Rs. which we use in our day to day transactions.000 and Rs.20. Government of India continued to issue currency notes till the Reserve Bank of India (RBI) was established on 1st April.50.Rs.

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Below here you can see how our old British currency notes looked like! .

The following are some other old British curreny notes: .

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Which denomonation note was first issued by RBI and in which year? .10000 in the year 1954. 3 paise.2. and these banknotes (Rs. 10 .10000 banknotes.1. 1934. Rs. Demonetization of higher denomination banknotes We find that Rs. However. 3.Self-Assessment Questions (SAQs) -1 1. Banknotes in the Mahatma Gandhi series were introduced in the year ______. Our printing of notes in the denominations of Re.20. Rs.10. Though.you cannot have banknotes in denominations higher than ten thousand rupees in terms of the current provisions of the Reserve Bank of India of Act. Rs.1000.10000) were again demonetized in January 1978. we reintroduced the higher denomination banknotes in Rs. 1. 2 paise. Our coins up to 50 paise are called 'small coins' and coins of Rupee one and above are called 'Rupee Coins'.1000.5000 and Rs. 50 paise. Our coins can be issued up to the denomination of Rs. primarily to curb unaccounted money in our system. 2. The Reserve Bank can also issue banknotes in the denominations of five thousand rupees and ten thousand rupees. you can find such banknotes issued earlier in circulation and these banknotes continue to be legal tender for us. Though our coins in the denomination of 1 paise. Rs. Rs.1000. or any other denomination that the Central Government may specify. 1000 and Rs. 2 and Rs.1 Denomination of Notes and Coins issued in India At present.1000. Present available denominations of coins in circulation in India Presently we have 25 paise. 5 paise. Rs. two rupees and five rupee coins being issued.5 has been discontinued as these denominations have been coinised.5000 and Rs.100. which were then in circulation were demonetized in January 1946. You call these notes as banknotes as they are issued by the Reserve Bank of India. our banknotes in India are issued in the denomination of Rs. However.50. Rs.500 and Rs. Hundies are ____________ . one rupee.

paise and 20 paise may still be in circulation. Can you recollect the year in which the high denomination notes were demonitized last? 4. NOIDA. but due to lack of demand we have discontinued the issue of such coins. . Mumbai and Hyderabad. We have four mints in India located at Kolkata. Self-Assessment Questions (SAQs) -3 1. 1. Name the places where the the Government mints are located . What name is given to the RBI note printing presses? 3. Regarding note printing presses RBI has its Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) presses at Salboni in West Bengal which is about 200 kms from Kolkata and another one at Mysore in Karnatka. Self-Assessment Questions (SAQs) -2 1. Coins can have a maximum value of Rs. What is the maximum denomination in which banknotes can be printed in India? 2.2. You may understand that most of the high denomination notes are printed at RBI presses.2 Issuer of Notes and Coins In India our coins are minted by the Government of India mints while the notes are printed by the Reserve Bank of India (RBI) and Government of India presses. you will find the government presses located at Dewas in Madhya Pradesh and Nasik in Maharashtra. What are Rupee coins? . The Reserve Bank of India isssues ________ and the Government of India issues_______? 2.________ 3.

Rs. Similarly. the Bank is liable to pay you the value of a banknote. (b) half rupee coin shall be legal tender for any sum not exceeding ten rupees. shall be legal tender in payment or on account i.2. 1934. 1906. 1934. 1934.e. Rs.e.500 and Rs.1 Promissory Clause You will find a Promissory Clause in all the banknotes. and shall be guaranteed by the Central Government. "I promise to pay the bearer an amount of X" is a statement which means that your banknote is a legal tender for X amount.5. Rs. 1..1000) shall be legal tender at any place in India in payment or on account for the amount expressed therein. .3 Importance of Legal Tender What is legal tender? Our coins which are issued under the authority of Section 6 of the Coinage Act. Rs.50. 1906]. being the issuer.10.20. subject to provisions of sub-section (2) Section 26 of RBI Act. The promissory clause printed on the banknotes i. Your every banknote issued by Reserve Bank of India (Rs. provided that a coin has not been defaced and has not lost weight so as to be less than such weight as may be prescribed in its case: (a) coin of any denomination not lower than one rupee shall be legal tender for any sum. 1940 are also legal tender and included in the expression Rupee coin for all the purposes of the Reserve Bank of India Act. The Bank's obligation to pay the value of banknote to you does not arise out of a contract but out of statutory provisions. The obligation on the part of the Bank is to exchange your banknote for coins of an equivalent amount. Rs.3. This is payable to you on demand by RBI. your One Rupee notes issued under the Currency Ordinance. Rs. What exactly is this? This means that as per Section 26 of Reserve Bank of India Act. (c) any other coin shall be legal tender for any sum not exceeding one rupee [Section 13 of The Coinage Act.1.100.

Who is the promissory in banknote? 3. The Reserve Bank also co-ordinates with the Government in the designing of of our banknotes. 1935 in accordance with the provisions of the Reserve Bank of India Act. including the security features. The guaranteer of a banknote is RBI. We find that the banknotes which are received from banks and currency chests are examined and those fit for circulation are reissued and the others (soiled and mutilated) are destroyed so as to maintain the quality of banknotes in circulation. 1934. Our Government. As you already know Reserve Bank of India was established on April 1. 1.4. places indent with the various printing presses. 488 repositories and 3562 small coin depots managed by banks and Government treasuries.4 Currency Management We find that the Department of Currency Management (DCM) in Reserve Bank of India has the responsibility of administering the functions of currency management. decides on various denominations of banknotes to be issued for us. The Central Office of the Reserve Bank of India was initially established in Calcutta (now Kolkata) but was later shifted to Mumbai (then Bombay) in 1937. 1. a core function of the Reserve Bank in terms of the Reserve Bank of India Act. This work is performed through 18 issue offices of the Reserve Bank and a wide network of 4195 currency chests.Self-Assessment Questions (SAQs) -4 1. The Central Office is where . Write the meaning of Legal Tender in your own words? 2.-(True/False) . The Reserve Bank estimates the quantity of banknotes that are likely to be needed denomination-wise and accordingly. on the advice of the Reserve Bank. 1934.1 Role of Reserve Bank of India The Reserve Bank derives its role in currency management from the Reserve Bank of India Act. For us currency management essentially relates to issue of our notes and coins and retrieval of unfit notes from circulation.The Reserve Bank manages currency in India for us. 1934.

2 Role of Government of India .to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage.the Governor sits and where policies are formulated.. Though. The Preamble of the Reserve Bank of India describes the basic activities of the Reserve Bank as: ".4. since nationalization in 1949." The follwing map shows the location of RBI offices: 1. the Reserve Bank is fully owned by the Government of India.. originally privately owned.

Jammu. The quantum of banknotes that needs to be printed. The Reserve Bank estimates the demand for banknotes on the basis of our growth rate of the economy. Thiruvananthapuram. Belapur. broadly depends on our requirement for meeting the demand for banknotes due to inflation.In terms of Section 25 of RBI Act. Guwahati. The Government of India decides the quantity of our coins to be minted on the basis of indents received from the Reserve Bank. Self-Assessment Questions (SAQs) -5 1. our replacement demand and our reserve stock requirements by using statistical models/techniques. a currency chest at Kochi and a wide net work . RBI approves the design of the banknotes. Kanpur.4. Nagpur. Bhopal. one sub-office at Lucknow. 1906 as amended from time to time. Chandigarh. Jaipur.4. Bangalore. True/False 3.3 Decision regarding volume and value of banknotes to be printed The Reserve Bank decides the volume and value of banknotes to be printed for us each year. New Delhi.4 Circulation of banknotes and coins The Reserve Bank presently manages our currency operations through its 18 Issue offices located at Ahmedabad. The responsibility for our coinage vests with the Government of India on the basis of the Coinage Act. Mumbai. Bhubaneswar. replacement of soiled banknotes and reserve stock requirements. Chennai. Who estimates the quantity of banknotes to be printed? . 1. Which department of RBI does the currency management work? 2. 1934 the design of our banknotes is required to be approved by the Central Government on the recommendations of the Central Board of the Reserve Bank of India. Kolkata. GDP growth. The Government of India also attends to the designing and minting of our coins in various denominations. Hyderabad. Patna. 1.

. we have 4271 Currency Chests and 4033 Small Coin Depots. 1. SCD stands for ______________.4. Our banknotes which are fit for reissue are sent back in circulation and those which are unfit for reissue are destroyed by way of shredding after completion of examination process. The bank branches receive the banknotes and coins from the Currency Chests and Small Coin Depots for further distribution among the public. As on June 30. . the Reserve Bank has authorised select branches of scheduled banks to establish Currency Chests. Which are the Mint Linked offices of RBI? 2.5 Role of Currency Chests and Coin Depots To facilitate the distribution of our banknotes and rupee coins. These offices then send them to the other offices of the Reserve Bank. The banknotes and rupee coins are stocked at the currency chests and small coins at the Small Coin Depots(SCD). Kolkata. for cancellation. segregates them into notes fit for reissue and those which are not. 2008. These offices receive fresh banknotes from the banknote printing presses. Similarly. Self-Assessment Questions (SAQs) -6 1. We understand that the Issue Offices of RBI send fresh banknote remittances to the designated branches of commercial banks. Our banknotes and coins returned from circulation are deposited at the Issue offices of the Reserve Bank. some of our coins received back from circulation are either reissued or are sent to the Mints for melting. The currency chest branches are expected to distribute banknotes and rupee coins to our other bank branches in their area of operation. The Reserve Bank offices located at Hyderabad. Mumbai and New Delhi (Mint linked Offices) initially receive the coins from the mints. The Reserve Bank subjects these to processing.of currency chests. authenticates banknotes for their genuineness. You find that hese are actually storehouses where banknotes and rupee coins are stocked on behalf of the Reserve Bank. What happens to notes which are not fit for circulation? 3.

We find that some bank branches are also authorised to establish Small Coin Depots to stock small coins. Mutilated banknotes are your banknotes. Activity 1. which have become dirty and limp due to excessive use. Our Small Coin Depots also distribute small coins to other bank branches in their area of operation. washed. . After going through the above text visit some banks in your area and write down the names of three Currency Chest branches. Your double numbered banknote cut into two pieces but on which both the numbers are intact is now being treated as soiled banknote. disfigured. You can have a look at some mutilated notes below.5 Soiled and Mutilated Banknotes Soiled banknotes are your banknotes. 2. eaten by white ants. burnt. Try to visit a Small Coin Depot in your area and see how they function. which are torn. etc. 1. You see from the follwing images how our solied notes look like.

. They are expected to offer this service even to non-customers.5. in respect of banknotes of Rs.5.10 and above. You can get value for these banknotes as a matter of grace as laid down in the Rules. Rs. Currently. These Rules have been framed under Section 28 of the Reserve Bank of India Act. Your payment of value of mutilated banknotes is governed by the Reserve Bank of India (Note Refund) Rules.All our banks are authorised to accept our soiled banknotes across their counters and pay us the exchange value. 1975.1.10 and above are concerned. the Reserve Bank and other authorised banks have provisions for paying you either full. The following banknotes are not payable to you under the Reserve Bank of India (Note Refund) Rules 1975. All our designated branches of commercial banks are authorised to adjudicate and pay us the value in respect of mutilated banknotes. half or no value as far as the banknotes in the denomination for Rs. 1. Soiled banknotes can be exchanged by you for full value.5. the prefix and three digits or four digits of the number in banknotes up to and inclusive of Rs.2 & Rs. as regards Re.1 Exchange of Soiled and Mutilated Banknotes All bank branches have been authorised to provide you the facility of exchanging soiled banknotes. i. 1975. which is y y less than half the area of the full banknote devoid of the major portion of the number on an undivided area.e. 1934. where this inadequacy is present at both the numbering panels. A banknote. y . The RBI has also authorised all our commercial bank branches to treat certain banknotes in µtwo pieces¶ as soiled banknotes and pay the exchange value to us. after adjudication. you can get either full or no value depending upon the condition of the banknote. in terms of the Reserve Bank of India (Note Refund) Rules.

Counterfeiting banknotes / using as genuine. 1. 3. Notes are exchaned under______________________. mutilated or tampered carrying extrinsic words or visible representation intended to convey or capable of conveying any message of a political character y y Self-Assessment Questions (SAQs) -7 1. depending on the offence. How will you identify a mutilated and a soiled note? 2.y cancelled by any office of the Reserve Bank or against which the value has already been paid found to be forged / counterfeit deliberately cut. forged or counterfeit banknotes / possession of forged or counterfeit banknote / making or possessing instruments or materials for forging or counterfeiting banknotes making or using documents resembling banknotes are offences under Sections 489A to 489E of our Indian Penal Code and are punishable in the Courts of Law by fine or imprisonment ranging from seven years to life imprisonment or both.6 Counterfeit and Forged Notes Our banknote on which the security features of genuine banknotes are not available / absent can be suspected to be a counterfeit banknotes and examined minutely. Self-Assessment Questions (SAQs) -8 . Do you have a right to claim the value of a note from RBI/Government? Yes/No . What type of notes are not accepted for payment under the Rules? 4.

showing us the denominational value 20. This feature can be seen by us better under a magnifying glass. Rs.1000 banknotes. contains a latent image.1 Secuirity Features in Banknotes Secuirity features are incorportated in the banknotes to help us to ascertain genuineness and to discourage forgery. Other than on Rs.20-Vertical Rectangle. Intaglio Printing: You will find that the portrait of Mahatma Gandhi.100.20 and above also contain the denominational value of the banknotes. Rs. 500 or 1000 as the case may be. Micro letterings: This feature appears between the vertical band and Mahatma Gandhi portrait.1000 banknote contains the inscription 'Bharat' in the Devanagari script.10. in raised prints in Rs. Rs. .500 and Rs. Security thread: Our Rs. Rs.Is possession of a forged banknote an offence? 2. Rs.e. Ashoka Pillar Emblem and RBI Governor's signature are printed in intaglio i.banknote. Our Mahatma Gandhi series-1996 banknotes contained several special features vis-à-vis the banknotes issued earlier. '1000' and 'RBI'. Identification mark: A special intaglio feature (raised printing) has been introduced on the left of the watermark window.50Square. We can see the value only when the banknote is held horizontally and light allowed to fall on it at 45° .500 and Rs.50. You will find that it contains the word µRBI¶ in Rs. Latent Image: The vertical band next to the (right side) Mahatma Gandhi¶s portrait. The security thread of our Rs.100-Triangle. iv. Rs.1000-Diamond) and helps the visually impaired to identify the denomination v. iii. Rs. 100. This feature is in different shapes for various denominations (Rs.20 and Rs.Offences regarding counterfeiting of banknotes are dealt under________________.1. These are i.500-Circle.6. ii. Our notes of Rs. otherwise this feature appears only as a vertical band. RBI has introduced new security features for the benefit of the public. Guarantee and promise clause. you can see that this thread contains the words 'Bharat' in the Devanagari script and 'RBI' appearing alternately. You can see this thread as partially exposed and partially embedded. When you hold it against light.10/. . Rs. Rs.50 notes contain fully embedded security thread. 50. Reserve Bank seal.100. 1.10.1000 banknotes contain windowed security thread.1000 banknotes. Rs. you can see this thread as one continuous line. on the obverse (front) on all banknotes except Rs.20.

Optically Variable Ink: The numeral 500 & 1000 on the Rs. Reserve Bank seal. You can see both when the banknotes are exposed to ultraviolet lamp. Rs. iii.500 and Rs.10. Water Mark and electrotype watermark: The portrait of Mahatma Gandhi.20 and Rs. Governor's signature and the identification mark for the visually impaired persons are printed in improved intaglio.1000 denomination banknotes have machine-readable windowed security thread with colour shift from green to blue when you view from different angles. as compared to MG series banknotes issued in these denominations earlier in the year 2000.500 and Rs. 50. 500 and 1000 appear in this section respectively in each denomination banknote and these can be viewed better when you banknote is held against light. Security Thread: The machine-readable security thread in Rs. vii. 20. mauve and brown] and Rs. ii. You can see that it fluoresces in yellow on the reverse and the text will fluoresce on the obverse under ultraviolet light. You will see that the colour of the numeral appears green when the banknote is held flat but it would change to blue when you hold the banknote at an angle. Optically Variable Ink (OVI): The font size of the numeral 500 and 1000 in Rs. Guarantee and promise clause. 20. Our Rs. iv. The thread appears as a continuous line from behind when you hold up against light. vii. The additional / new security features in MG Series 2005 banknotes. See through register: Half the numeral of each denomination (10.100. . Ashoka Pillar emblem.1000 denomination banknotes is reduced.vi.1000 banknotes are printed in Optically Variable Ink viz.You will find that the thread fluoresces in yellow on both sides under ultraviolet light. 50. a colour-shifting ink. Our banknotes also have optical fibres. The accurate back to back registration makes the numeral appear as one when viewed against light. Fluorescence: The number panels of the banknotes are printed in fluorescent ink. Dual coloured optical fibres. i. You can see that the colour of these numerals appears green when the banknotes are held flat but you would find them change to blue when the banknotes are held at an angle.500 [revised colour scheme of mild yellow. You can see under UV lamp. Rs. the multidirectional lines and an electrotype mark showing the denominational numeral 10. 500 and 1000) is printed on the obverse (front) and half on the reverse. viii. 100. v. vi.. Intaglio Printing: In this we find that the portrait of Mahatma Gandhi. 100. Watermark: Our banknotes also contain the Mahatma Gandhi watermark with a light and shade effect and multi-directional lines in the watermark window.50 denomination banknotes is windowed on front side and fully embedded on reverse side.

Can blind people recognise Indian currency notes? Explain. Self-Assessment Questions (SAQs) -10 1. What do you understand by a clean note? 2. you and the members of public are requested to ensure the following: y y y You shold not staple the banknotes You should desist from writing/putting rubber stamp or any other mark on the banknotes You should store your banknotes safely to prevent any damage These practices would lead more life to our currency and improve the image of our banknotes in the eyes of the public. You should teach and practice these habits in your own house . What is intaglio printing? 2. To help RBI and banking system.viii.[1] Self-Assessment Questions (SAQs) -9 1. 1. Year of Printing: You can see the year of printing on the reverse of the banknote Inorder to see the above security features in detail you can also click on the RBI link alongside to see them more elaborately. 3. .100 bankote. Write five secuirity features of your Rs. How are you going to convince your neighbour regarding Clean Note Policy of RBI? . in public and at your place.7 Clean Note Policy Now you can appreciate that Reserve Bank of India has been continuously making efforts to make good quality banknotes available to the members of public.

You should know the essential features of banknotes inorder not to get duped by forged and counterfeit notes. . draft or cash.Any legislation passed by Parliament.. It is an extension of RBI vault. You can exchange your mutilated and soiled notes at RBI and other commercial banks' counters. 6. Banknote ±Currency issued by the Reserve Bank of India. 5. Act. 3. Currency Chest. nothing is written / no rubber stamp or any other mark on the banknotes .Clean Note -Banknotes which are not to stapled. Our security features of banknotes establish the genuineness of our banknotes. Let's Sum Up This chapter covered various aspects of our Indian currency and coins. 4. Glossary 1. You should help the RBI to circulate clean notes and towards this you should act as a responsible citizen. Counterfeit banknotes-Banknote on which the security features of genuine banknotes are not available / absent.A company authorised by RBI to take deposits from the public for the purpose of lending and investment and repayable on demand by way of cheque . From the above lesson you can now appreciate that historically the use of our coins is older than that of paper currency. 2. Banking.Branches stoking currency notes on behalf of RBI. The sole issuer of our banknotes is the Reserve Bank of India and the coins are minted by the Government of India mints.

Who decides on the volume and value of banknotes to be printed and on what basis? 8. Mutilated banknotes. How does the Reserve Bank estimate the demand for banknotes? 10. What is the Indian currency called? 2. What are the present denominations of banknotes you can find in India? 3. 9. etc. What is a small coin depot? . What are the present available denominations of coins in India? 4. burnt.Banknotes. disfigured. What is the meaning of "I promise to pay" clause? 6. What is the role of the Reserve Bank of India in currency management? 7.Banknotes. eaten by white ants. 8. Intaglio Printing-Raised printing in banknotes. 10. 1. What do you understand by a "legal tender"? 5. What is a currency chest? 11. Optically Variable Ink (OVI)-The colour of the numeral appears green when the banknote is held flat but would change to blue when the banknote is held at an angle.7. which have become dirty and limp due to excessive use. Who decides on the quantity of coins to be minted? 9. which are torn. washed. A double numbered banknote cut into two pieces but on which both the numbers are intact is now being treated as soiled banknote Practice Test I hope after going throgh this lesson you are in a position to answer the following questions in your own words. Soiled banknotes.

SAQ-2 1.000/2.1000/3. Rupees Five 2. Banknotes and Coins . What are soiled and mutilated banknotes? Can such banknotes be exchanged for value? 15. Rs. 1996 3. Coins of Rupee one and above are called 'Rupee Coins'. Answers to SAQs The following are the answers to the SAQs in this lesson SAQ-1 1.12.10. SAQ-3 1. 1978 4. What happens when the banknotes and coins return from circulation? 13. Hundies are financial instruments . What types of banknotes are not eligible for payment under the Note Refund Rules? 16. How do you differentiate between a genuine banknote and forged / counterfeit banknote. From where can you obtain banknotes and coins? 14. Rs.

It is the Central Government. eaten by white ants. disfigured. Kolkata. burnt. Bharatiya Reserve Bank Note Mudran Pvt. etc. 3. Department of Currency Management 2. 2. SAQ-7 1. Mutilated banknotes are banknotes. Soiled and Mutilated banknotes. Hyderabad. Mumbai and New Delhi . which have become dirty and limp due to excessive use.The Central Government. They are shredded for destruction. which are torn. Legal Tender means the value shall be payed by the issuing authority. 4.A double numbered banknote cut into two pieces but on which both the numbers are intact is now being treated as soiled banknote. No. 3. 3. Soiled banknotes are banknotes. 2. False. It is only as of grace. The Governor of Reserve Bank of India. (i) Kolkata (ii) NOIDA (UP) (iii) Hyderabad and (iv) Mumbai SAQ-4 1. SAQ-5 1. . The Reserve Bank of India (Note Refund) Rules 1975 3. Limited (BRBNMPL) 3. SAQ-6 1. 2. The Reserve Bank of India. washed. False. SCD stands for Small Coin Depot.2.

Rs. 20. triangle etc. SAQ-9 1. the multidirectional lines and an electrotype mark showing the denominational numeral 10. Rs. Yes by way of touching the intaglio printing on different denomination of banknotes near the watermark which are in the form a square. (b) Intaglio Printing: The portrait of Mahatma Gandhi. 20.20 and Rs. 50. The following are the five security features in a banknote of Rs.100. 100.100/(a) Security Thread: The machine-readable security thread in Rs.10. The accurate back to back registration makes the numeral appear as one when viewed against light. Guarantee and promise clause. It is raised printing of certain features on a banknote like denomination. 500 and 1000) is printed on the obverse (front) and half on the reverse. Reserve Bank seal.50 denomination banknotes is windowed on front side and fully embedded on reverse side. 500 and 1000 appear in this section respectively in each denomination banknote and these can be viewed better when the banknote is held against light. The thread fluoresces in yellow on both sides under ultraviolet light. 100. signature of the promissor etc. as compared to MG series banknotes issued in these denominations earlier in the year 2000. 3. Governor's signature and the identification mark for the visually impaired persons are printed in improved intaglio. The thread appears as a continuous line from behind when held up against light.1000 denomination banknotes is reduced.500 and Rs. (e) Optically Variable Ink (OVI):The font size of the numeral 500 and 1000 in Rs.Under Sections 489A to 489E of the Indian Penal Code and are punishable in the Courts of Law by fine or imprisonment ranging from seven years to life imprisonment or both. .SAQ-8 1. (d) Water Mark and electrotype watermark: The portrait of Mahatma Gandhi. (c) See through register: Half the numeral of each denomination (10. It fluoresces in yellow on the reverse and the text will fluoresce on the obverse under ultraviolet light.500 and Rs.Yes it is an offence? 2. Ashoka Pillar emblem. The colour of the numeral appears green when the banknote is held flat but would change to blue when the banknote is held at an angle. 50.1000 denomination banknotes have machine-readable windowed security thread with colour shift from green to blue when viewed from different angles.Rs. depending on the offence. 2.

History of Reserve Bank of India Vol-I 2. The Reserve Bank of India Act 1934 3. not to handle his banknotes carelessly . 1940 7. References and Further Readings 1.SAQ-10 1. Banknotes which are not to stapled and on which nothing is written or do not bear any rubber stamp or any other mark on them are called as clean notes. The Coinage Act 1906 4. 1975 6. I shall convince my neighbour not to staple . The Paper Currency Act of 1861 5. 2. The Reserve Bank of India website . To help RBI and banking system. not to write. The Currency Ordinance. Reserve Bank of India has been continuously making efforts to make good quality banknotes available to the members of public. He should also store the banknotes safely to prevent any damage. The Reserve Bank of India (Note Refund) Rules.