Multiple choice

Currency notes of the RBI are backed by certain assets.
These assets must not be less than a prescribed amount of

  1. gold and foreign securities

  2. gold

  3. government securities

  4. gold, foreign securities and government securities
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A Correct answer
Explanation

The RBI issues currency notes under the Minimum Reserve System, which requires the bank to maintain assets in the form of gold and foreign securities to back the currency.

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