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"The Reserve Bank of India… (Class 12 Economics 2026, Q12b)

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EconomicsCBSE Class 12 · Board exam 2026, set 58/5/1 · 3 marks · Short answer

CBSE Class 12 Economics 2026: question 12(b)

Set in the CBSE Class 12 board exam of 2026, paper 58/5/1, section A, question 12(b), for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q12(b) · 3 marks · Short answerMoney and Banking

"The Reserve Bank of India (RBI) is the sole authority for issuing currency notes in India, with an exception of ₹ 1 denomination that is issued by the Ministry of Finance."

Do you agree with the given statement ? Explain the rationale behind the monopoly enjoyed by the Reserve Bank of India (RBI) on this front.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 58/5/1.

Hints

Open one hint at a time and try again before the next.

Hint 1

Who signs a ₹ 1 note and who signs a ₹ 100 note?

Hint 2

Why would many issuers of notes cause problems?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Yes, I agree. The RBI is the sole issuer of currency notes in India; only ₹ 1 notes and coins are issued by the Ministry of Finance (Government of India).

    1 mark

  2. The monopoly of note issue brings uniformity in the currency in circulation and strengthens public faith in it. It also lets the RBI control the money supply and so maintain the value of the rupee and price stability.

    2 marks

Answer: Agree: the RBI alone issues notes (except ₹ 1 notes and coins); the monopoly gives uniformity, public confidence and control over money supply.

Where the marks are

  • Agreement and the ₹ 1 exception (marked as a whole, 3)

Revise the chapter

  • Chapter: Money and Banking (notes, formulas, where marks are lost and every past question)
Practise this chapterBoard-style questions from Money and Banking, one at a time, marked against the answer key and marking points.Back to the full paper2026 board paper, set 58/5/1: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.