The table below shows some sources of change in the monetary base of India for 2023-24, in Rs crore.
| Currency in circulation | Cash with banks | Currency with the public |
|---|---|---|
| 35,11,461 | 1,01,185 | 34,10,276 |
Which of the following relations is shown by these figures?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Currency in circulation = Cash with banks + Currency with the public
The currency issued by the RBI is held either by the public or by the banks. So the two parts add up to the whole currency in circulation.
Check with the figures: 1,01,185 + 34,10,276 = 35,11,461, the currency in circulation.
NCERT (2026-27): “Central bank … From the point of view of money supply, we need to focus on its function of issuing currency. This currency issued by the central bank can be held by the public or by the commercial banks, and is called the ‘high-powered money’ or ‘reserve money’ or ‘monetary base’ as it acts as a basis for credit creation.” |