Money and Banking Test - 11

Cash deposit ratio refers to that portion of total deposit which a commercial bank has to keep with the central bank in the form of cash deposit

The Indian 10-rupee banknote (₹10) is a common denomination of the Indian rupee. The ₹10 note was one of the first notes introduced by the Reserve Bank of India as a part of the Mahatma Gandhi Series in 1996, which is presently in circulation

Bank Rate refers to the official interest rate at which RBI will provide loans to the banking system which includes commercial / cooperative banks, development banks etc. Such loans are given out either by direct lending or by rediscounting (buying back) the bills of commercial banks and treasury bills. Thus, bank rate is also known as discount rate. Bank rate is used as a signal by the RBI to the commercial banks on RBI ’s thinking of what the interest rates should be.
Impact of Bank Rate
When RBI increases the bank rate, the cost of borrowing for banks rises and this credit volume gets reduced leading to decline in supply of money. Thus, increase in Bank rate reflects tightening of RBI monetary policy.

SLR means liquid statutory ratio. Every bank has to keep that amount of money every time. because customers can withdrew money any time. Bank can not give that money on loan or for any other purpose.

Under Section 22 of the Reserve Bank of India Act, RBI has sole right to issue currency notes of various denominations except one rupee notes.
The One Rupee note is issued by Ministry of Finance and It bears the signatures of Finance Secretary, while other notes bear the signature of Governor RBI.
However RBI is the only source of legal tender money because distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government.