On April 1, 1935, the RBI was established and was given the role of currency management based on the Reserve Bank of India Act, 1934.
Exchanging notes while buying or receiving currency while selling something is a common phenomenon that occurs almost every day. Each note has a different and unique value of its own. The governor of the Reserve Bank of India (RBI) is responsible for the value of the notes present in the country except for the Re 1 note as it bears the signature of the Finance Secretary of India.
Apart from Re 1 note, the signature of the Governor of RBI is present on all currencies.
When was RBI established?
Before 1935, the Government of India was responsible for the printing of the currency. However, on April 1, 1935, the Reserve Bank of India was established. The headquarter of RBI is located in Maharashtra's Mumbai and RBI was given the role of currency management on the basis of the Reserve Bank of India Act, 1934. Notably, Section 22 of the Reserve Bank of India Act authorises the Reserve Bank to issue notes.
Why do currency notes have 'I promise to pay....' printed on them?
You must have seen 'I promise to pay 100/500/2000 rupees to the holder' on the notes of Rs 100, 500, 2000, and so forth. Along with this, the RBI governor's signature is also on the note. Today, let us tell you why this message is printed on the note. For the unversed, the printing of notes in India is done on the basis of the Minimum Reserve System.
What are the rules of the Reserve Bank of India?
RBI writes a statement to assure the holder that if you have two hundred rupees note, it means that the Reserve Bank has gold reserves of your two hundred rupees. Something similar is written on other notes i.e. gold is safe with RBI equal to the value of your notes. That is, there is a guarantee that for a note of 100 or 200 rupees, the holder has a liability of 100 or 200 rupees. This is the RBI's commitment to the value of the notes.
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 "Wonder why currency notes have 'I promise to pay the bearer' printed on them? Know here")
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