The Intriguing History of the
Indian Rupee and it’s Evolution
The history of Indian currency not only spans centuries but also boasts quite a
fascinating past. Read on for a brief glimpse of India’s – and your wallet’s –
financial history.
T he rupee in your 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 6th century BC. Let’s demystify this
history by bringing you the interesting stories about how Indian currency has
evolved over the ages into the rupee of today.
Ancient Indians were the earliest issuers of coins in the world, along with the
Chinese and Lydians (from the Middle East). The first Indian coins – punch
marked coins called Puranas, Karshapanas or Pana – were minted in the 6th
century BC by the Mahajanapadas (republic kingdoms) of ancient India.
These included Gandhara, Kuntala, Kuru, Panchala, Shakya, Surasena, and
Saurashtra.
Made of silver of a standard weight but with irregular shapes, these
coins had different markings – for example, Saurashtra had a humped
bull, Dakshin Panchala had a Swastika, and Magadha had several
symbols.
Then came the Mauryas who punch marked their coins with a royal standard.
Chanakya, prime minister to the first Mauryan emperor Chandragupta
Maurya, mentions the minting of coins such
as rupyarupa (silver), suvarnarupa (gold), tamararupa (copper)
and sisarupa (lead) in his Arthashastra treatise.
The Indo-Greek Kushan kings who came next introduced the Greek custom
of engraving portrait heads on coins. Their example was followed for eight
centuries. The extensive coinage of the Kushan empire also influenced a
large number of tribes, dynasties, and kingdoms, which began issuing their
own coins.
Kushan coins had the diademed, helmeted bust
of the king on one side, and the king’s favourite
deity on the reverse.
The Gupta Empire produced large numbers of gold coins depicting the Gupta
kings performing various rituals. This tradition of intricately engraved coins
continued till the arrival of the Turkish Sultanate in North India.
The Gupta coins, with their many varieties and
inscriptions in Sanskrit, are among the finest
India has produced.
By the 12th century AD, the Turkish Sultans of Delhi had replaced the royal
designs of Indian kings with Islamic calligraphy. The currency – made in gold,
silver and copper – was now referred to as tanka, with the lower valued coins
being called jittals. The Delhi Sultanate also attempted to standardise
the monetary system by issuing coins of different values.
The commencement of the Mughal Empire from
1526 AD brought forth a unified and
consolidated monetary system for the entire
empire.
But the defining moment in the evolution of the
rupee occurred when, after defeating Humayun,
Sher Shah Suri set up a new civic and military
administration. He issued a coin of silver,
weighing 178 grains, which was termed
the rupiya and was divided into 40 copper
pieces or paisa. The silver coin remained in
use during the remaining Mughal period.
By the time the British East India Company set itself up in India in the 1600s,
Sher Shah’s silver rupiya had already become the popular standard
currency in the country. 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.
In 1717 AD, the English obtained permission from Mughal emperor Farrukh
Siyar to coin Mughal money at the Bombay Mint. The British gold coins were
termed carolina, the silver coins angelina, the copper coins cupperoon, and
the tin coins tinny.
Paper money was first issued in British India in the 18th century, with the
Bank of Hindostan, General Bank in Bengal and the Bengal Bank becoming
the first banks in India to issue paper currency.
The oldest surviving banknote in India was
issued by the Bank of Bengal – a Two Hundred
and Fifty Sicca Rupees note dated September
3, 1812.
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 1862, the Victoria portrait series of bank notes and coins were issued in
honour of Queen Victoria and later, many emperors followed suit. For security
reasons, the notes of this series were cut in half; one half was sent by post
and upon confirmation of receipt, the other half was sent.
The Reserve Bank of India was formally set up in 1935 and was empowered
to issue Government of India notes. RBI also printed 10,000 rupee notes (the
highest denomination RBI has ever printed in its history) that were later
demonetised after independence.
The first paper currency issued by RBI was a 5
rupee note bearing King George VI’s portrait, in
January 1938.
After India became independent in 1947, India’s
monetary system remained unchanged for a
while, with 1 rupee consisting of 64 pice. The
first banknote printed by independent India was
a 1 rupee note.
On August 15, 1950, the new ‘anna system’ was introduced – the first coinage
of the Republic of India. The British King’s portrait was replaced with the
engraving of Ashoka’s Lion Capital of Sarnath, and the tiger on the 1 rupee
coin was replaced with a corn sheaf. One rupee now consisted of 16 annas.
The 1955 Indian Coinage (Amendment) Act, which came into force on April 1,
1957, introduced a ‘decimal series’. The rupee was now divided into
100 paisa instead of 16 annas or 64 [Link] coins were initially called naye
paise, meaning new paise, to distinguish them from the previous coins.
In order to aid the blind in the country, each
coin had distinctly different shapes – the round
1 naya paisa, scalloped edge 2 naya paisa, the
square 5 naya paisa, and the scalloped edge
10 naya paisa.
Also, prior to Independence, the Indian currency was pegged against silver.
The silver-based rupee fluctuated according to the value of silver and had a
distinct disadvantage when trading against currencies that were based on the
gold standard. This was rectified post-Independence.
In 1959, a special issue of Rupees 10 and
Rupees 100 notes took place for Indian Haj
pilgrims so as to ease money exchange with
the local currency in Saudi Arabia.
In 1969, the Mahatma Gandhi Birth Centenary
Commemorative Issue was released. It was the
only commemorative note issue ever by the
Reserve Bank of India.
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Later, in 1996, the ‘Mahatma Gandhi Series’ was introduced with prominent
new features such as changed watermarks, windowed security threads, latent
images, and intaglio features for the visually handicapped. This was replaced
in 2005 by the ‘MG series’ notes that had some additional security features.
In 2010, India celebrated its hosting of the Commonwealth Games with
commemorative 2 and 5 Rupee coins. One side of these coins features the
logo of the Games while the other features the three lions from the pillar of
Ashoka. In the same year, India also adopted the new symbol for the rupee ₹,
with new coins bearing this symbol being launched in 2011.
Since 2010, other commemorative coins have also been issued – 60th
anniversary of the Indian Parliament, 150th anniversary of Swami
Vivekananda, and more recently, International Day of Yoga.
