44th B.P.S.C. (Pre) 2000
Note issue system in India is based on-
aProportional Fund System
bMinimum Reserve System✓ Correct
cFixed Exchange System
dFull Variability System
Explanation
Under the Reserve Bank of India (Amendment) Act, 1956, it was necessary to keep a minimum gold reserve of Rs. 115 crore and foreign securities worth Rs. 400 crore. However, under the Reserve Bank of India (Second Amendment) Act, 1957, the minimum combined reserve of gold and foreign securities was fixed at Rs. 200 crore, in which gold worth Rs. 115 crore was required and the remaining Rs. 85 crore was required in foreign securities.
economic-social-development