Question : Choose the incorrect statement from given below:
Option 1: Central bank has the sole authority to issue currency in India.
Option 2: All currency coins are minted by the Central government in India
Option 3: Currency notes in India are guaranteed by the central government.
Option 4: Currency notes are known as ‘limited Legal tender’.
Correct Answer: Currency notes are known as ‘limited Legal tender’.
Solution : The correct answer is (d). Currency notes are known as ‘limited Legal tender’.
Currency notes in India are known as unlimited legal tender. This means that they can be used to pay any amount of debt, regardless of the size of the debt.
The other statements are all correct. The central bank of India, the Reserve Bank of India (RBI), has the sole authority to issue currency in India. All currency coins in India are minted by the Government of India Security Printing and Minting Corporation (SPMC). Currency notes in India are guaranteed by the central government.
So, the answer is Currency notes are known as ‘limited Legal tender’.
