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History of Indian Currency

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History of Indian Currency

The current currency of India “Rupee” derives its origin from the word Rup or Rupa, which means Silver in Hindi. Similarly the word Rupyakam in Sanskrit literally means coins of Silver. The derivation term Rupaya was used to indicate the coins issued during Sher Shah Reign around 15th century.
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The original Rupaya was a silver coin weighing 175 grains troy (about 11.34 grams), which was used in India for a long period of time, that is even during British India. Formerly the rupee was divided into 16 annas, 64 paise, or 192 pies.

The earliest generation of Indian currency was in Silver, which developed some consequences in the 19th century. As the strongest economies of the world were dealing in Gold Standard, understandably, the amount bought with Silver was comparatively very less. This event when the Indian Currency could not buy much from the west was termed as the “Fall of Rupee”. 

The generation of paper rupees was initialized by the Bank of Hindustan and the General Bank of Bengal and Bihar. Later, in the “Paper Currency Act of 1861, the Government had the monopoly of note issue throughout the vast expanse of 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.

The Reserve Bank of India was established in the 1935, with its central office at Calcutta. During the initial course of its operation, it had to continue issuing the Government notes until it was ready with its own series of Notes.

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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.

In August 1940, the one-rupee note was reintroduced as a wartime measure, as a Government note with the status of a rupee coin.

In 1949, just after independence, Government came out with its new proposal for Re.1 note that would bear Mahatma Gandhi’s portrait on it. But, however the final decision included the picture of Lion capital of Ashoka. 

In 1953, Hindi was seen properly displayed on the note. In 1957, the decimalization system developed, where a Rupee was divided into 100 Naya Paisa, which later was termed as simply “Paise”.

The "Mahatma Gandhi Series" was introduced in 1996. Prominent new features included a changed watermark, windowed security thread, latent image and intaglio features for the visually handicapped. Now the RBI produces notes of denominations Rs.5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500 and Rs. 1000. The coins valid today are of the denominations of Rs. 1, 2, 5 and 10.

The currency sign of   rupees  ₹ was adopted by the Government of India in 2010 as a symbol for Indian Rupee.

The Government of India is set to introduce a new ₹20 coin with a dodecagonal shape, and like the ₹10 coin, also bi-metallic, along with new designs for the new versions of the ₹1, ₹2, ₹5 and ₹10 coins, which was announced on 6 March 2019. The Government of India has the only right to mint the coins and one rupee note. 

The responsibility for coinage comes under the Coinage Act, 1906 which is amended from time to time. The designing and minting of coins in various denominations is also the responsibility of the Government of India.

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On 2016, the Government of India announced the demonetisation of all ₹500 (US$6.60) and ₹1,000 (US$13) banknotes of the Mahatma Gandhi Series.

The government claimed that the action would curtail the shadow economy and crack down on the use of illicit "black money" and counterfeit cash to fund illegal activity and terrorism. On 8 November 2016, the RBI announced the issuance of new ₹500 and ₹2,000 banknotes in a new series after demonetisation of the older ₹500 and ₹1000 notes. 

The new Indian banknote series feature a few micro printed texts on various locations. The first one lies on the inner surface of the left temple of Gandhi's spectacles that reads "भारत" (Bhārata) which means India. 
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