Who decides when to print money in India?

However, RBI was granted its role in currency management on the basis of the Reserve Bank of India Act in 1935. Specifically, section 22 of the RBI Act gives authority to the Reserve Bank to issue currency notes. The Reserve Bank of India has printing facilities throughout the country at Dewas, Mysore and Salboni.

RBI Limitations: The Indian Government

Although the RBI has the power to print Indian currency, the government still has the final say on a majority of the Reserve Bank's actions. For example, the government decides on the various denominations printed and the design of bank notes, including the security features. As of 2015, notes of Rs 10, Rs 100, Rs 500 and Rs 1,000 are printed by the Reserve Bank. However, the Reserve Bank has the right to print currency notes of up to Rs 10,000. If the Reserve Bank wanted to print anything higher, the government would need to amend the Reserve Bank of India Act. In addition, when the Reserve Bank estimates the demand for bank notes each year, it must file a written request with government officials to sign off on before printing. When making these final decisions, government officials rely heavily on advice from the Reserve Bank senior staff.

What About Coins?

While the Reserve Bank of India prints currency, the government of India directly handles the minting of coins. Coins are minted at the four India government mints at Alipore in South Kolkata, Saifabad in Hyderabad, Cherlapally in Hyderabad and Noida in Uttar Pradesh. Although the government handles minting coins, the Reserve Bank issues them for circulation.

Other Responsibilities

In addition to printing money, the Reserve Bank of India has other major responsibilities aimed at maintaining stability of the Indian financial system. The Reserve Bank of India issues monetary policy and controls and supervises banks across the country.

The Reserve Bank reviews its monetary policy strategy every two years, as well as each quarter. The main objectives of the Reserve Bank's monetary policy is to control inflation, control bank credit and control interest rates.

The banking system in India is made up of numerous public, private, foreign, co-operative and regional rural banks. The Reserve Bank is in charge of supervising the overall operations of these various institutions to maintain financial stability.

BY : investopedia , The Reserve Bank of India was founded on April 1, 1935, under the Reserve Bank of India Act. The institution is headquartered in Mumbai, India. Prior to 1935, the government of India had the responsibility of printing money.

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