<P> The Act contains the definition of the so - called scheduled banks, as they are mentioned in the 2nd Schedule of the Act . These are banks which were to have paid up capital and reserves above 5 lakh . </P> <P> The Section 17 of the Act defines manner in which the RBI can conduct business . The RBI can accept deposits from the central and state governments without interest . It can purchase and discount bills of exchange from commercial banks . It can purchase foreign exchange from banks and sell it to them . It can provide loans to banks and state financial corporations . It can provide advances to the central government and state governments . It can buy or sell government securities . It can deal in derivative, repo and reverse repo . </P> <P> The Section 18 deals with emergency loans to banks . The Section 21 states the RBI must conduct the banking affairs for the central government and manage public debt . The Section 22 says that only RBI has the exclusive rights to issue currency notes in India . The Section 24 states that the maximum denomination a note can be ₹ 10,000 (US $150). </P> <P> The section 26 of Act, describes the legal tender character of Indian bank notes . </P>

Rbi has the authority to make and issue bank notes under
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