Fascinating History Of The Indian Rupee And It¡¯s Evolution
The rupee which we keep in our pocket has a mysterious past. Behind Mahatma Gandhi¡¯s smiling face lies a long history of struggle, exploration, and wealth that can be traced back to the ancient India of the sixth century BC.
Let¡¯s demystify this history of the Indian rupee and know about how Indian currency has evolved over the ages into the rupee of today.
The word ¡®Rupee¡¯ has been derived from the Sanskrit word Rupyakam, meaning a silver coin. It owes its origin to Rupiya, issued by Sher Shah Suri in 1540-45. Today, the Reserve Bank of India issues currency under the RBI Act 1934.
History of the Indian rupee
The history of the Indian rupee traces back to ancient India in circa sixth century BCE.?Ancient India was one of the earliest issuers of coins in the world, along with the Chinese wen and Lydian staters. The first Indian coins were minted by the Mahajanpadas (the Republic Kingdoms of ancient India) known as Puranas, Karshapanas or Panas. These Mahajanapadas included Gandhara, Kuntala, Kuru, Panchala, Shakya, Surasena, and Saurashtra.
These coins were made of silver and a standard weight but with irregular shapes and different markings like Saurashtra had a humped bull, Dakshin Panchala had a Swastika and Magadha had several symbols.
Then first Maurya emperor Chandragupta Maurya came up with the Punch Marked Coins minting of silver, gold, copper, or lead. Indo-Greek Kushan kings introduced the Greek custom of engraving portraits on the coins. Chanakya, prime minister to the first Mauryan emperor mentioned the minting of coins such as Rupyarupa (silver),? Suvarnarupa (gold), Tamararupa (copper) and Sisarupa (lead) in his Arthashastra treatise.
The Turkish Sultans of Delhi had replaced the royal designs of Indian kings with Islamic calligraphy by the twelfth century AD. The currency was made up of gold, silver and copper known as Tanka and the lower valued coins known as Jittals. The Delhi Sultanate also attempted to standardise the monetary system by issuing coins of different values.
The Mughal Empire from 1526 AD consolidated the monetary system for the entire empire. In this era, the evolution of the rupee occurred when Sher Shah Suri defeated Humayun and issued a silver coin of 178 gms known as Rupiya and these coins were remained in use during the Mughal period, Maratha era and British India.
When the British East India Company set itself up in India in the 1600s, Sher Shah¡¯s silver Rupiya had remained popular. Despite many attempts to introduce the sterling pound in India, the Rupaiya grew in popularity and was even exported as a currency to other British colonies.
The British Empire
In the 18th Century, the Bank of Hindostan General Bank in Bengal and the Bengal Bank became the first banks in India to issue paper currency. During this time paper money was first issued in British India.
After the 1857 revolt, the British made the rupee the official currency of colonial India, with the head of King George VI replacing native designs on banknotes and coins.
In the 19th century, the British introduced paper money into the subcontinent. The Paper Currency Act of 1861 gave the Government the monopoly of notes issued throughout the vast expanse of British India, which was a considerable task. Eventually, the management of paper currency was entrusted to the Mint Masters, the Accountant Generals and the Controller of Currency.
A series carrying the portrait of George V was introduced in 1923 and was continued as an integral feature of all paper money issues of British India. These notes were issued in denominations of Rs 1, 2?, 5, 10, 50, 100, 1,000, 10,000.
The Reserve Bank of India was formally inaugurated on Monday, April 1, 1935, with its Central Office in Calcutta. Section 22 of the RBI Act, 1934, empowered it to continue issuing Government of India notes until its own notes were ready for issue. The bank issued the first five rupee note bearing the portrait of George VI in 1938. This was followed by Rs. 10 in February, Rs 100 in March and Rs 1,000 and Rs 10,000 in June 1938. The first Reserve Bank issues were signed by the second Governor, Sir James Taylor.
The first paper currency issued by the Reserve Bank of India was a five rupee note bearing King George VI¡¯s portrait, in January 1938.
After gaining Independence in 1947, India¡¯s modern Rupee reverted back to the design of the signature Rupee coin. The symbol chosen for the paper currency was the Lion Capital at Sarnath which replaced the George VI series of banknotes. So, the first banknote printed by Independent India was a 1 rupee note.
The "Anna Series" was introduced on 15 August 1950. This was the first coinage of the Republic of India.
The King's image was replaced by Ashoka's Lion Capital. A corn sheaf replaced the tiger on the one rupee coin. The monetary system was retained with one rupee consisting of 16 Annas. The 1955 Indian Coinage (Amendment) Act, which came into force with effect from 1 April 1957, introduced a "Decimal series". The rupee was now divided into 100 'Paisa' instead of 16 Annas or 64 Pice.
In order to aid the blind in the country, each coin had distinctly different shapes ¨C the round 1 naya paisa, scalloped edge 2 naya paisa, the square 5 naya paisa, and the scalloped edge 10 naya paisa.
In 1959 a special issue of rupees ten and Rupees One Hundred were issued for the Indian Haj Pilgrims so that they could exchange it with local currency in Saudi Arabia.
In 1969 Reserve Bank of India issued the Mahatma Gandhi Birth Centenary Commemorative design series on Rs 5 and Rs 10 notes.
In 1980 new notes were issued with symbols of science & tech (Aryabhatta on Rs 2 note), progress (oil rig on Rs 1 and farm mechanisation on Rs 5) and Indian art forms on Rs 20 and Rs 10 notes (Konark wheel, peacock).
In 1987 Rs 500 note was introduced due to the growing economy and fall in purchasing power.
In 1996 the Mahatma Gandhi series of notes was issued, starting with Rs 10 and Rs 500 notes. This series has replaced all notes of the Lion capital series. A changed watermark, windowed security thread, latent image and intaglio features for the visually handicapped were the new features.
On July 15, 2010, India introduced a new currency symbol, the Indian rupee sign, ?.
In 2011, 25 paise coins and all paise coins below it were demonetised. New series of 50 paise coins and Rs 1, Rs 2, Rs 5 and Rs 10 notes with the new rupee symbol introduced.
November 8, 2016
The Republic of India witnessed the second major monetary reform in November 2016 when it withdrew the legal tender status of Rs 500 and Rs 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank of India till November 8, 2016.
The new banknotes were introduced in the Mahatma Gandhi (New) Series, highlighting the cultural heritage and scientific achievements of the country. Distinct colours were used for the different denominations and sizes were reduced. Two new denominations viz. Rs 2000 on November 08, 2016, and Rs 200 on August 23, 2017, were introduced in the Mahatma Gandhi (New) Series.
