History Of Indian Currency: Evolution Of Rupee

The rupee that we carry around in our pockets has a curious history. Behind Mahatma Gandhi’s smiling face is a long history of struggle, exploration, and wealth that dates back to the sixth century BC in ancient India.

The word ‘Rupee’ comes from the Sanskrit word Rupyakam, which means “silver coin.” Its origins can be traced back to Sher Shah Suri’s Rupiya, which was issued between 1540 and 1545. The Reserve Bank of India issues currency today in India according to the RBI Act of 1934.

History Of Indian Currency

Then came the Punch Marked Coins, which were made of silver, gold, copper, or lead and were minted by the first Maurya ruler Chandragupta Maurya. Kushan kings of Indo-Greek descent brought the Greek practice of etching portraits on coinage. In his Arthashastra treatise, Chanakya, the first Mauryan emperor’s prime minister, detailed the minting of coins such as Rupyarupa (silver), Suvarnarupa (gold), Tamararupa (copper), and Sisarupa (lead).

By the twelfth century AD, the Turkish Sultans of Delhi had supplanted Indian kings’ regal designs with Islamic calligraphy. The money consisted of Tanka (gold, silver, and copper coins) and Jittals (lower value coins). The Sultanate of Delhi also tried to standardize the monetary system by issuing coins of various denominations.

From 1526 AD, the Mughal Empire centralized the entire empire’s monetary system. The genesis of the rupee happened during this period when Sher Shah Suri fought Humayun and issued the Rupiya, a silver coin weighing 178 grams that was used during the Mughal, Maratha, and British periods. Sher Shah’s silver Rupiya had remained popular until the British East India Company arrived in India in the 1600s. Despite numerous attempts to introduce the sterling pound into India, the Rupaiya grew in popularity and was even exported to other British colonies as a currency.

Currency Notes in India 

Before Independence:

• The British introduced paper money to the subcontinent in the nineteenth century. The Paper Currency Act of 1861 gave the government a monopoly on the issuing of notes throughout British India, which was a huge task. The Mint Masters, Accountant Generals, and the Controller of Currency were eventually entrusted with the management of paper currency.

After Independence:

• India’s contemporary Rupee reverted to the design of the iconic Rupee coin after the country gained independence in 1947. The Lion Capital at Sarnath was chosen as the symbol for the paper currency, which superseded the George VI series of banknotes. As a result, Independent India’s first banknote was a one-rupee note.
• On August 15, 1950, the “Anna Series” was released. This was the Republic of India’s first currency.
• Ashoka’s Lion Capital took the place of the King’s portrait. On the one rupee currency, a maize sheaf has taken the place of the tiger. The monetary system remained unchanged, with one rupee equaling 16 Annas. The Indian Coinage (Amendment) Act of 1955, which took effect on April 1, 1957, established a “Decimal series.” Instead of 16 Annas or 64 Pice, the rupee was now divided into 100 ‘Paisa.’
• On 8 November 2016,  The Republic of India underwent its second significant monetary reform in November 2016, when the Reserve Bank of India revoked the legal tender status of Rs 500 and Rs 1,000 banknotes printed by the Mahatma Gandhi Series until November 8, 2016.
• The new banknotes are part of the Mahatma Gandhi (New) Series, which celebrates the country’s cultural history and scientific achievements. The different denominations were given different colors, and the sizes were lowered. The Mahatma Gandhi (New) Series debuted two new denominations: Rs 2000 on November 8, 2016, and Rs 200 on August 23, 2017.

Oldest Currency Of India:

During the Mughal and Maratha dynasties, as well as in British India, the silver coin was used.

Sher Shah Suri established a new military government during his five-year empowerment from 1540 to 1545, and produced a 178-grain silver currency known as the Rupiya. [4][6] In 1604–1605, the Mughal monarch created coins honoring Hindu deities. The silver and gold coins representing Ram and Sita were issued, with minting ending shortly after Akbar’s death in 1605.v The Bank of Hindustan (1770–1832), the General Bank of Bengal and Bihar (1773–75, founded by Warren Hastings), and the Bengal Bank (1784–1791) were among the first to issue paper rupees.

In the 1970s, cost-benefit considerations led to the eventual abolition of the 1, 2, and 3 paise coins. In 1988, stainless steel coins of 10, 25, and 50 paise were launched, followed by one rupee coins in 1992. Due to the high costs of maintaining note releases of Rs 1, Rs 2, and Rs 5, coins for these denominations gradually replaced notes in the 1990s.

Conclusion

India used the par value system of trade after independence till 1971. In 1971, the country shifted to a pegged system, and in 1975, it advanced to a basket peg against five major currencies. After India’s economic liberalization in 1991, currency exchange rates were regulated by the market. The first big impact on exchange rates after independence was the depreciation of sterling versus the US dollar in 1949, which had an impact on currencies that were pegged to sterling, such as the Indian rupee. The next important event occurred in 1966, when the Indian rupee was devalued by 57% against the US dollar. As a result, the exchange rates versus the Pound Sterling have depreciated as well.