Question

As “bank of issue”, the central bank mainly ______.

Options

• Grants long-term loans to industry

• Has the monopoly of issuing currency notes (except certain small notes/coins)

• Controls the government’s budget

• Manages the stock exchange

Answer 1

As “bank of issue”, the central bank mainly has the monopoly of issuing currency notes (except certain small notes/coins).

Explanation: 

The central bank enjoys a monopoly on note issue (with small exceptions like the ₹1 note/coins by the government), ensuring a uniform and trusted currency.