Classification of Money

Full Bodied Money: It is money whose value as a commodity for non-monetary purposes is as great as its value as money. Most of the earlier commodity money, e.g. gold, silver, cattle etc.

Representative Full Bodied Money: This type of moneys usually made of paper. It is equivalent to a circulating warehouse receipt for full bodied coins or their equivalent in bullion.

Credit Money: This refers to money, whose value as money is greater than the commodity of the material from which the money is made.

Classification of Money

Credit Money is of various forms

  1. Token Coins: All our coins are token coins in the sense that their value as money is far above the value of the metal contained in them.
  2. Representative Token Money: This is usually of the form of paper, which is in effect a circulating warehouse receipt for token coins or an equivalent amount of bullion that is banking it.
  3. Circulating Promissory Notes Issued by Central Banks: This is the greatest part of modern currency, and includes all currency notes in India issued by the Reserve bank of India.

Printing of Currency Notes

The currency is printed at two government owned presses at Nasik and Dewas and a press each at Mysore and Salboni (West Bengal) owned by Bharatiya Reserve Bank Note Mudran Private Ltd., a fully owned subsidiary of RBI.

Printing of Securities and Minting in India

  1. India Security Press (Nasik Road) - Postal Material, Postal Stamps, Non-postal Stamps, Judicial and Non-Judicial Stamps, Cheques, Bonds, NSC, Kisan Vikas Patram Securities of State Governments. Public Sector Enterprises and Financial Corporations.
  2. Security Printing Press (Hyderabad) – Established in 1982 for meeting the demand for postal material by Southern States. It also fulfills the demand for Union Excise Duty Stamps of the Country.
  3. Currency Notes Press - (Nasik Road) – Since 1991, this press prints currency notes of Rs.1, Rs.2 Rs.5, Rs.10, Rs.50 and Rs.100. (Earlier printing of Rs.50 and Rs.100 currency notes was not done here.)
  4. Bank Notes Press - (Dewas) – Currency notes of Rs.20, Rs.50, Rs.100 and Rs.500 are printed here.
  5. Modernised Currency Notes Press – Two new modernized currency notes press are under established currency notes press are under establishment at Mysore (Karnataka) and Salboni (West Bengal).
  6. Security Paper  Hoshangabad (Established in 1967 – 68) makes production of Bank and Currency notes paper.

Coins are minted at four places – Mumbai, Kolkata, Hyderabad and Noida

New Series of ’Star’ Bank Note Issued by RBI

The Reserve Bank of India has introduced a new series of ‘Star’ bank note, which will be issued in Rs.10, Rs.20 and Rs.50 denominations to replace the defective notes in various series. According to the RBI declarations, the new series of notes would look like the existing ones in the Mahatma Gandhi series but will have an additional character – a star in the number panel. These notes have been issued as part of efforts to benchmark its procedures with international best practices. RBI has adopted the star series numbering system for replacement of the defectively printed bank notes. Packers with star series notes will have 100 pieces as usual but not in serial order. As per the RBI release, the new star series banknotes would be legal tender and public may freely accept and use these ntoes.

Source of Aggregate Monetary Resources: The RBI shows that there are five sources of money aggregates which are as follows:

  1. Net Bank Credit to the Government
  2. Bank Credit to the Commercial Sector
  3. Foreign Exchange Assets

Reserve Money (M0)

In simple terms, reserve money (M0) can be called as government money produced by RBI (RBI is also taken as government) and let by the people and the banks. The reserve money is often called high powered money, basic money, primary money or monetary. Reserve money is actually the cash held by the public and the banks.

Filed in: ECONOMICS
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