NOTES


IAS Prelims > General Studies > Fundamental Rights, Fundamental Duties and Directive Principle of State Policy

Currency as Legal Tender



Ans.

The coins issued under the authority of Section 6 of The Coinage Act, 1906, shall be legal tender in payment or on account i.e. provided that a coin has not been defaced and has not lost weight so as to be less than such weight as may be prescribed in its case: -

•      coin of any denomination not lower than one rupee shall be legal tender for any sum,

•      half rupee coin shall be legal tender for any sum not exceeding ten rupees,

•      any other coin shall be legal tender for any sum not exceeding one rupee [Section 13 of The Coinage Act, 1906].

 

Similarly, the One Rupee notes issued under the Currency Ordinance, 1940 are also legal tender and included in the expression Rupee coin for all the purposes of the Reserve Bank of India Act, 1934. As per Section 26 of Reserve Bank of India Act, 1934, the Bank is liable to pay the value of banknote.This is payable on demand by RBI, being the issuer.





Notes of Fundamental Rights, Fundamental Duties and Directive Principle of State Policy



  1. Currency as Legal Tender
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