RBI TO PUT ONE-RUPEE NOTES IN CIRCULATION

The Reserve Bank of India (RBI) said that it will soon put in circulation currency notes in one-rupee denomination.
- “The notes will be printed by the Government of India,” the RBI said in a press release.
- “These currency notes are legal tender as provided in The Coinage Act 2011,” it added.
- The new currency note will be predominantly pink green on obverse and reverse in combination with other colours, the RBI said.
- Unlike other currency notes which the bear signature of RBI Governor, the one rupee note will have signature of the Finance Secretary.
- The New notes will contain the bilingual signature of Rajiv Mehrishi, Finance Secretary.
After a gap of about two decades, the RBI will again put in circulation rupee one notes soon.
Printing of one rupee note was discontinued about 20 years ago.
At present, one rupee coins are minted.
One rupee note or coin is issued by the Government of India.
In November 1994, printing of one rupee note was stopped mainly due to higher cost and for freeing capacity to print currency notes of higher denomination.
Printing of two and five rupee notes too were discontinued in 1995. Since then, only coins have been issued for these denominations.
Older notes are still in circulation and remain legal tender.
Other paper currency notes currently being printed are Rs10,Rs 20,Rs 50,Rs 100,Rs 500 and Rs 1,000.

The RBI manages currency in India and derives its role in currency management on the basis of the Reserve Bank of India Act, 1934.

What is legal tender?

The coins issued under the authority of Section 6 of The Coinage Act, 2011, shall be legal tender in payment or on account.
Every banknote issued by Reserve Bank of India shall be legal tender at any place in India in payment or on account for the amount expressed therein, and shall be guaranteed by the Central Government, subject to provisions of sub-section (2) Section 26 of RBI Act, 1934.

What is the meaning of “I promise to pay” clause?

As per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay the value of banknote.
The promissory clause printed on the banknotes i.e., “I promise to pay the bearer the sum of Rupees …is a statement which means that the banknote is a legal tender for the specified amount.
The obligation on the part of the Bank is to exchange a banknote with bank notes of lower value or other coins which are legal tender under the Indian Coinage Act, 2011, of an equivalent amount.

Why is One Rupee liability of the Government of India?

In case of the Currency minted/printed by the RBI,