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Section 31 of the RBI Act, 1934 reserves a specific category of monetary instruments to the Reserve Bank or to persons authorised by the Act or the Central Government. Which instruments fall within that restriction?
Answer & Solution
Correct answer: D.
1. Section 31 reserves a category of bearer instruments to the Reserve Bank.
2. No person other than the Bank or someone expressly authorised may draw, accept or issue bills of exchange, hundis, promissory notes or engagements for payment payable to bearer on demand.
3. The proviso allows cheques and drafts including hundis payable to bearer on demand drawn on a banker, shroff or agent.
4. Postal orders and cryptocurrencies are not the Section 31 subject.
_Source: ICSI CS Executive Paper 7 (Economic, Business and Commercial Laws) — Lesson 1: Reserve Bank of India Act, 1934, pp. 8-21._
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