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Section 39 - Obligation to supply different forms of currency, Section 40 - Transactions in foreign exchange: RBI Act 1934

 

 

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

Section 39 of RBI Act 1934 : "Obligation to supply different forms of currency"

(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.

 

Section 40 of RBI Act: 1934  "Transactions in foreign exchange"

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.

 

RBI ACT 1934

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 21B - Effect of agreements made between the Bank and certain States before the 1st November, 1956

Section 22 - Right to issue bank notes

Section 23 - Issue Department

 

 

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 32 - Penalty

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

Section 40 - Transactions in foreign exchange

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