UPSC Prelims 2000 Q33: Indian Economy – Banking & Financial Sector
- (a) Japanese Yen
- (b) Deutsche Mark
- (c) Euro
- (d) French Franc
Answer: (b) Deutsche Mark
Explanation
Currencies of the Resurgent India Bonds
| Feature | Resurgent India Bonds (1998) |
|---|---|
| Issued by | State Bank of India, on behalf of the government |
| When | August 1998, after the Pokhran-II sanctions |
| Currencies | US Dollar, Pound Sterling and Deutsche Mark |
| Raised | About US$ 4.2 billion from non-resident Indians |
After the Pokhran-II nuclear tests of May 1998 brought economic sanctions, the State Bank of India issued Resurgent India Bonds in August 1998 to raise foreign exchange from non-resident Indians.
The bonds were denominated in US Dollar, Pound Sterling and Deutsche Mark, and raised about US$ 4.2 billion.
The euro did not exist as a currency until 1 January 1999, so it could not have been used.
The later India Millennium Deposits (2000) were issued in Dollar, Pound, Euro and Yen.
Answer: (b) Deutsche Mark.
Why each option is right or wrong
- (a) Incorrect. The yen came in later, with the India Millennium Deposits of 2000.
- (b) CORRECT. The bonds were issued in Dollar, Pound Sterling and Deutsche Mark.
- (c) Incorrect. The euro was launched only in January 1999, after the bonds.
- (d) Incorrect. The French franc was not one of the three currencies.
Key point
RIB 1998 (SBI): $, £, DM. IMD 2000: $, £, €, ¥.
Remember
Resurgent India Bonds: SBI, August 1998, Dollar-Pound-Deutsche Mark.
Common mistakes
- Picking the euro, forgetting it began only in 1999.
- Mixing up the Resurgent India Bonds with the India Millennium Deposits.
- Thinking the RBI, not the State Bank of India, issued them.
Exam tip
1998 → no euro yet; the German mark was Europe's leading currency.
Sources
- Reserve Bank of India — Annual Report 1998-99, external sector chapter (rbi.org.in)
- Ministry of Finance — Economic Survey 1999-2000 (indiabudget.gov.in)