Q.Which of the following institutions has the sole authority to issue currency notes in India (other than one-rupee notes and coins)?

This tests the single most exclusive function of the central bank among the options given.

The correct option is (c) Reserve Bank of India. Among the functions of the RBI covered in this chapter, sole authority to issue currency notes is one of its most exclusive powers — no other bank in India, however large, may issue currency notes.

• (a) State Bank of India is incorrect — it is a large commercial bank that accepts deposits and lends, but it has no authority to issue currency.
• (b) NABARD is incorrect — it is a development bank for agriculture and rural development, not a currency-issuing authority.
• (c) Reserve Bank of India is correct — the RBI alone holds this authority, as explained in this chapter's section on the RBI's functions. …

Eliminate each option by checking it against the specific function named (currency issue), not against …

Do not confuse 'a large, well-known bank' (like SBI) with 'the central bank' — size and reputation are not the criterion; only the RB …