Question

Assertion (A): Central Bank is also known as the Bank of Issue.

Reason (R): Central Bank of India (RBI) enjoys the sole monopoly of issuing currency notes.

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true but Reason (R) is false.

• Assertion (A) is false but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Explanation:

The Central Bank is known as the “Bank of Issue” precisely because of its legal authority to print and circulate currency. In India, the Reserve Bank of India (RBI) has an absolute, exclusive monopoly on issuing legal tender banknotes, which explains the title of the assertion.