What is Obligation to supply different forms of currency? What are Transactions in foreign exchange? Section 39 and 40 of Reserve Bank of India Act 1934
(1) The Bank shall issue rupee coin on demand in exchange for bank notes and currency notes of the Government of India, and shall issue currency notes or bank notes on demand in exchange for coin which is legal tender under the Coinage Act, 2011 (11 of 2011).
(2) The Bank shall, in exchange for currency notes or bank notes of two rupees or upwards, supply currency notes or bank notes of lower value or other coins which are legal tender under the Coinage Act, 2011 (11 of 2011), in such quantities as may, in the opinion of the Bank, be required for circulation; and the Central Government shall supply such coins to the Bank on demand. If the Central Government at any time fails to supply such coins, the Bank shall be released from its obligations to supply them to the public.
The Bank shall sell to or buy from any authorized person who makes a demand in that behalf at its office in Bombay, Calcutta, Delhi or Madras or at such of its branches as the Central Government may, by order, determine, foreign exchange at such rates of exchange and on such conditions as the Central Government may from time to time by general or special order determine, having regard so far as rates of exchange are concerned to its obligations to the International Monetary Fund :
Provided that no person shall be entitled to demand to buy or sell foreign exchange of a value less than two lakhs of rupees.
Explanation. In this section "authorized person" means a person who is entitled by or under the Foreign Exchange Regulation Act, 1973 (46 of 1973) to buy, or as the case may be, sell, the foreign exchange to which his demand relates.
Section 21 - Bank to have the right to transact Government business in India
Section 21A - Bank to transact Government business of States on agreement
Section 22 - Right to issue bank notes
Section 24 - Denominations of notes
Section 25- Form of bank notes
Section 26 - Legal tender character of notes
Section 26A - Certain bank notes to cease to be legal tender
Section 27 - Re-issue of notes
Section 28 - Recovery of notes lost, stolen, mutilated or imperfect
Section 28A - Issue of special bank notes and special one rupee notes in certain cases
Section 29 - Bank exempt from stamp duty on bank notes
Section 30 - Powers of Central Government to supersede Central Board
Section 31 - Issue of demand bills and notes
Section 33 - Assets of the Issue Department
Section 34 - Liabilities of the issue department
Section 35 - Initial assets and liabilities
Section 36 - Method of dealing with fluctuations in rupee coin assets
Section 37 - Suspension of assets requirements as to foreign securities
Section 38 - Obligations of Government and the Bank in respect of rupee coin
Section 39 - Obligation to supply different forms of currency