A Study on Currency and Coinage Circulation in India (original) (raw)

In India, currency forms a significant part of money supply. Money supply is generally viewed in two senses. Money supply in the conventional sense includes notes and coins in circulation (nominally claims against the central bank and / or the government of the country) plus those deposits with banks which are repayable on demand. This is also referred to as the narrow definition of money supply and is widely known as M 1. When time deposits with banks are added to M 1, the definition of money supply becomes broader and is in India known as M 3. However, this research study focuses only on the aspect of banknotes and coins, which is a part of M 1 , but plays a vital role in currency management.