RBI as Currency Authority

The RBI is the sole authority for the issue of currency other than one-rupee notes and coins and small coins which are issued by Government of India. 

There are two separate departments:

1. Issue Department
2. Banking Department

The Issue department is responsible for the issue of notes as per demand made by Banking department.
The issue of currency into circulation and its withdrawal from circulation take place through the Banking Department of RBI.

Currency:

• All the currency issued by the RBI must be backed by assets(gold coin, foreign securities, rupee coins and Government of India securities) of equal value.
• Currency notes are issued by RBI under "Minimum Reserve System 1957" with  backing of Rs 200 crore reserve (Gold: Rs 115 crore + Foreign Securities: Rs 85 crore)
• RBI has power to print currency notes of up to Rs 10,000.
• Banks note printing takes place at Bank Note Press, Devas(MP), Currency Notes Press, Nasik(Maharashtra) 
• All currency notes has signature of RBI's Governor.

Coins:

• The Government of India has the sole right to mint coins. The responsibility for coinage vests with the Government of India in terms of the Coinage Act, 1906 as amended from time to time. The designing and minting of coins in various denominations is also the responsibility of the Government of India. 
• Coins are minted at the four India Government Mints at Mumbai, Alipore(Kolkata), Saifabad(Hyderabad), Cherlapally (Hyderabad) and NOIDA (UP).
• The coins are issued for circulation only through the Reserve Bank in terms of the RBI Act.
• RBI has power to issue coins of up to Rs 1000.
• Rs 1 note has signature of Finance Secretary to GoI.

Some Facts:

• Rs 5-note was the first paper currency issued by RBI in Jan. 1938.
• In India currency notes are made up of cotton and cotton rag. Technically, it is not a paper but a cloth that look and feel of paper.
• The paper of our currency notes has been imported from Japan and Australia. 
• RBI planning to introduce plastic notes in 2015.