Importance of ""bank of issue"" as a function of central bank.

Dear student,
The central bank of every country enjoys the monopoly right to issue the currency notes. It is considered to be a ' supreme currency authority' of the country. No commercial bank issues its own currency.
However the monopoly of central bank to issue currency may be partial in certain countries. In India, all notes except one rupee note or coin are issued by Reserve Bank of India. Rupee one coin or note is issued by Finance ministry of India.

Importance of bank of note issue function of central bank-
1) It leads to uniformity in note issue and note circulation.
2) The central bank can exercise a better control over money supply in the country.
3) It raises public confidence in the monetary system of the country.
4) Effective control over creation of paper currency becomes easier.

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