Proportional reserve system  The central bank keeps a percentage in gold and remaining portion in government securities against notes issued. Generally 25 to 40% is kept in gold or silver before issue of money. A %age of money is to be kept in gold for new issue of money. It provides essential requirement.  • This … Read more

Minimum reserve system The central bank keeps a minimum reserve of gold under the law. A maximum limit of note is not fixed. After keeping the reserve any amount of money can be issued. Additional issue of notes does not require further metallic reserves. • This method is use in Pakistan after December 1965. • … Read more