Assertion (A): No individual or organisation is allowed to issue currency notes in India.

Reason (R): In India, only RBI issues currency notes on behalf of the Central Government.

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

Both (A) and (R) are true but (R) is not the correct explanation of (A).

(A) is correct but (R) is wrong.

(A) is wrong but (R) is correct.

answer is A.

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Detailed Solution

Both (A) and (R) are true and (R) is the correct explanation of (A).
It is true that no individual or organisation other than the Reserve Bank of India (RBI) is allowed to issue currency notes in India. The Reserve Bank of India (RBI) is the central bank of India, which has the sole authority to print currency notes in the country. It also supervises the functioning of the formal sources of credit, including commercial banks and cooperatives, thereby regulating the entire banking system in the country. The central bank also has control over the supply and direction of money in the economy. Because of this exclusivity in the currency issue, the public maintains faith in the currency system.

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