Bank Principle: According to this principle there is no need of reserve requirements of gold and silver for the notes issued. The banks are authorized to regulate the note issue keeping in view the needs of the business in the country. The banks themselves will maintain adequate reserves of gold for meeting their obligations of note. If there is an over issue of notes, the excess money will be automatically presented for each payment and proper ratio will be maintained between the supply of money and the gold reserves.
Posted on: Fri, 05 Sep 2014 04:35:56 +0000
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