Question

In 2016, RBI declared currency notes of Rs 500 & Rs 1000, no longer legal tender, This
function of RBI is called as
This process is called as
(a) Bank of issue, Remonetisation (b) financial advisor, Demonetisation
(c) Bank of issue, Demonetisation (d) financial advisor, Remonetisation
​

Answer 1

Answer:

(d) financial advisor, Remonetisation

Answer 2

The answer is (c) Bank of issue, Demonetization.

• In 2016 when the Reserve Bank Of India had declared the currency notes of Rs 500 & Rs 1000 as not to be considered as legal tender, that function of the Reserve Bank of India is called demonetization.
• Under this process, the current form of money supply available in the country has to be declared null and void and is often then replaced with new coins and notes.
• The main object of doing so is basically to firstly, reduce the corruption prevailing in the country, and secondly is to remove fake and black currency from the money circulation.