Govt can print Re1 note: Law ministry2 min read . Updated: 07 Sep 2014, 07:32 PM IST
The ministry says the 2011 Coinage Act does not bar the central government from printing Re1 notes
New Delhi: Putting to rest the debate on the printing of ₹ 1 notes, the law ministry has opined that the central government has all the powers to print currency notes of this denomination.
While the Reserve Bank of India (RBI) has the authority to issue bank notes of denominational values of ₹ 2, ₹ 5, ₹ 10, ₹ 20, ₹ 50, ₹ 100, ₹ 500, ₹ 1,000, ₹ 5,000 and ₹ 10,000, the ₹ 1 note was printed and issued by the central government.
The central government also has the sole right to mint coins of all denominations. However, since the RBI was of the view that with the repeal of Section 2 of the Currency Ordinance, the central government is not empowered to issue ₹ 1 notes, the law ministry’s opinion was taken. The law ministry said that the Coinage Act of 2011, which consolidates the laws relating to coinage and the mints, does not bar the central government from printing ₹ 1 notes.
Section 4 of the Act provides that the central government may authorize the minting of coins of denomination not higher than ₹ 1,000, it said, adding that the definition of a coin in the Act makes it clear that the central government’s ₹ 1 note is included in the definition of a coin.
The Act defines a coin as “made of any metal or any other material stamped by the government or any other authority empowered by the government in this behalf and which is a legal tender including commemorative coin and government of india one rupee note," the ministry said in its opinion.
“Further, apart from the metal, the coin may be made of any other material," it said.
The ministry said while repealing the Currency Ordinance, 1940, “necessary provisions for inclusion of Government of India one rupee note within the meaning of ‘coin’ have been consciously incorporated in the Coinage Act, 2011. Further, the RBI, as per Section 24(1) of the RBI Act, 1934, is not empowered to issue bank note of denomination of value of one rupee."
“Central government is not precluded to issue one rupee Government of India note under the Coinage Act, 2011. The dimension, design, material and standard weight of such one rupee note have to be prescribed by the central government in terms of Section 4 and 5 of the Coinage Act, 2011," the opinion said.
The printing of notes in the denominations of ₹ 1 and ₹ 2 has been discontinued as these denominations have been coinized. However, such notes issued earlier are still in circulation. PTI