Distinguish between:
Legal Tender Money and Non-Legal tender Money.
Legal Tender Money | Non-Legal Tender Money |
(i) Legal Tender Money is the money that is backed by law and refusal to accept will be punishable by law. | (i) Non-legal tender money is the money that is generally used by people but there is no legal compulsion to accept it. |
(ii) It is issued by the Central bank of the country. | (ii) It is issued by commercial banks. |
(iii) It is freely accepted as a medium of exchange. | (iii) It is not legal tender money. No one can force you to accept it. |
(iv) Currency notes issued by RBI in denominations ₹ 5, 10, 20, 50, 100, 200, 500, 2000 are legal tender money. | (iv) Negotiable instruments such as cheques, bank drafts, bills of exchange are nonlegal tender money. |