Tomorrow, August 15th 2009 is our 62nd Independence Day.We celebrate freedom on this day. India has a rich history of tradition, culture, art, mathematics and in every field of study.With so many facts of our nation,i chose to blog about Indian Currency and its evolution. The coins and notes are often referred to as Currency. Cheques,credit cards,debit cards are other forms of money supply. Currency evolved from two basic innovations: using counters and then the silver metal bars.Both these occurred during 2000BC. Along with commodities,they formed the basis of trade for about 1500 years until the collapse of the trading company that found the flaw:no place to store them.By the late Bronze age,it was thought that ox-hide shaped ingots of copper was the currency and continued for several years.This came to an end due to increase in piracy and raiding. It was with the recovery of Phoenician trade in ninth century BC the real coinage form appeared.Sign of return to prosperity!!! The first coin was probably in Anatolia with Croesus of Lydia and subsequently with the Greeks and Persians.
CoinageMetals of gold, silver and copper were mined, weighed and stamped into coins.It also created unit of account,which was lead to banking.Coins could be easily tested even if they were tampered.Gold coins were used for larger purchases.Silver coins for paying taxes and dues.Copper coins for common transactions.Our Nation since ancient days of Mahajanapadas(16 great kingdoms) used coinage system.
Paper MoneyPaper money originated in two forms: drafts and bills.Drafts are receipts for value held on account and bills which were issued with a promise to convert at a later date. Drafts were used by Ptolemaic Egypt for credit transfers during first century BC.Paper money was essentially used as a promise to represent precious metals.Gradually,the metals were removed and the paper money was represented for credit.During times of ancient china,coins were made with rectangular hole in the middle.Merchants tied them together with a rope and wore.More the coins richer the person.When the coins are too heavy to carry, they handle it to a trustworthy person in return for a slip of paper mentioning about the coins the Merchant had.If merchant produced this slip to the person he could regain his coins.Eventually,paper money evolved,also called as promissory note.The first such note was called "jiaozi".
Indian Currency Pre-Independence
It is believed that the first set of currency in rupees was introduced during 1486-1545 by the Mughal emperor Sher Shah Suri.Rupee was available in different formats when India was ruled by British,French and Portugese.
Notes of the Portuguese Territories in India:(Rupias)The Portuguese were the first Europeans to reach India in the medieval times.Major territories included Goa, Daman, Diu and Dadra-Nagar Haveli, all situated in western India.Paper money was introduced in Goa for the first time in 1883. These notes were issued by the Department of Public Finance. They were followed by the next issue in 1888, by Government of the State of India. Both these issues incorporated a profile portrait of Dom Luiz I, the king of Portugal.In 1906, the issue of notes was entrusted to Banco Nacional Ultramarino, the bank responsible for issue of paper money for Portuguese overseas territories. Initially notes beared the "Steamship Seal" of the bank. Later on, popular images such as a temple, an elephant or a tiger were depicted on the notes. The notes were usually issued in denominations of 5, 10 , 20, 50, 100, 500 and 1000 "Rupias". The portrait of Afonso de Albuquerque, the "Conquistador" of Goa was introduced on the notes.
Notes of the French Territories in India:(Roupies)The French East India Company came into India after the British.Established territories in the Southern parts of the country.These included Mahe, Karaikkal, Pondicherry, Yauaon and Chandernagore. The issue of paper money for the French settlements was entrusted to the Bank Indochine, which issued them under specific notes. The earliest known issue is of 50 Roupies issued in 1898. The early issues were 10 and 50 Rps. Notes of 1 Roupie were issued immediately after World War I. Notes of 5 Roupies were introduced in 1937.
Victoria portrait series:The first set of British India notes were the 'Victoria Portrait' Series issued in denominations of 10, 20, 50, 100, 1000. These were unifaced and carried two language panels. British India Notes facilitated inter-spatial transfer of funds. As a security precaution, notes were cut in half. One set was sent by post. On confirmation of receipt, the other half was despatched by post. Compulsions of the first World War led to the introduction of paper currency of small denominations. Rupee One was introduced on 30th November, 1917 followed by the exotic Rupees Two and Annas Eight. The issuance of these notes was discontinued on 1st January, 1926 on cost benefit considerations. These notes first carried the portrait of King George V and were the precursors of the 'King's Portrait' Series which were to follow. The King's Portrait Motif continued as an integral feature of all Paper Money issues of British India. Government of India continued to issue currency notes till 1935 when the Reserve Bank of India took over the functions of the Controller of Currency. These notes were issued in denominations of Rs 5, 10, 50, 100, 500, 1000, 10,000. In January 1938 the first Five Rupee note was issued bearing the portrait of George VI. This was followed by Rs 10 in February, Rs 100 in March and Rs 1,000 and Rs 10,000 in June 1938.
Indian Currency Post-Independence
India won its independence on 15th August, 1947. During the period of transition India retained the monetary system and the currency and coinage of the earlier period.
The coinage system
The Frozen seriesThis represented the currency arrangements during the transition period upto the establishment of the Indian Republic. The Monetary System remained unchanged at One Rupee consisting of 192 pies. 1 Rupee = 16 Annas 1 Anna = 4 Pice 1 Pice = 3 Pies
The Anna SeriesThis series was introduced on 15th August, 1950 and represented the first coinage of Republic India. A corn sheaf replaced the Tiger on the one Rupee coin. In some ways this symbolized a shift in focus to progress and prosperity. The monetary system was largely retained unchanged with one Rupee consisting of 16 Annas.
1 rupee = 16 annas = 64 pices = 192 pies
The Decimal SeriesThe move towards decimalisation was afoot for over a century. However, it was in September, 1955 that the Indian Coinage Act was amended for the country to adopt a metric system for coinage. The Act came into force with effect from 1st April, 1957. The rupee remained unchanged in value and nomenclature. It, however, was now divided into 100 ‘Paisa’ instead of 16 Annas or 64 Pice. For public recognition, the new decimal Paisa was termed ‘Naya Paisa’ till 1st June, 1964 when the term ‘Naya’ was dropped.
1 rupee = 100 paise
Naya Paisa Series 1957-1964With commodity prices rising in the sixties, small denomination coins which were made of bronze, nickel-brass, cupro-nickel, and Aluminium-Bronze were gradually minted in Aluminium. This change commenced with the introduction of the new hexagonal 3 paise coin. A twenty paise coin was introduced in 1968 but did not gain much popularity.
Aluminium Series 1964 onwardsOver a period of time, cost benefit considerations led to the gradual discontinuance of 1, 2 and 3 paise coins in the seventies; Stainless steel coinage of 10, 25 and 50 paise, was introduced in 1988 and of one rupee in 1992.
The notes SystemThe effigy of George VI in the notes just prior to independence was replaced by the emblem of the Nation - the Ashokan lion pillar - capital of Sarnath. New notes were issued in 1951, with a completely new design for 100 Rupees, showing elephants. The first issue contained denominations of 1, 2, 5, 10 and 100 Rupees. Later on, in 1953, it was realised that the national language Hindi was not accorded a proper place on the new notes. Consequently, notes with denominations written prominently in Hindi were issued. The Hindi so introduced was grammatically incorrect, and the mistake was correct in the next two years. In 1956 high denomination notes of 1000, 5000 and 10000 Rupees were issued. The 1000 Rupee note had the picture of Rajarajeshwara Temple at Tanjore, while the Gateway of India at Bombay featured on the 5000 Rupee note.
In 1964, new notes of a smaller size were issued. The size of high denominational notes, however, was not changed. These notes had the following depiction:
2 Rupees Royal Bengal Tiger
5 Rupees Indian Blackbuck
10 Rupees A sailing boat (dhow)
100 Rupees Hirakund Dam on river Mahanadi, Orissa.
In 1969, the birth centenary of the Father of the Nation, Mahatma Gandhi was celebrated. New notes of a commemorative design showing Gandhi reading a prayer book on back were issued. In 1972, notes of a new denomination of 20 Rupees were introduced.Similarly in 1974, notes of 50 Rupees denomination were issued.
In 1977, the high denominational notes were demonetised. During the 1980s, an entirely new series for all denominations was issued. The new designs show various panels such as:
1 Rupee Off-shore oil platform at Bombay High
2 Rupees Indian Satellite "Aryabhatta"
5 Rupees Tractor tilling the fields
10 Rupees Panel showing peacock, the Indian National Bird
20 Rupees Sculpture of wheel at Konark Sun Temple
50 Rupees The Indian Parliament House, New Delhi
100 Rupees Agrarian scene
In 1987, notes of 500 Rupee denomination were issued for the first time, after nearly 75 years. These notes show the portrait of Mahatma Gandhi on the face, with the sculpture "Gandhi leads the nation" on the back. The same effigy in obverse was utilised once more in 1996, when new notes of 10, 50 and 100 Rupees were issued. These notes bear the representations of animals, Parliament House and Himalayas on the reverse, respectively.
Currently, Indian rupee is available only in the denomination of Re.1 and Rs.2 coins and notes ranging from Rs.5 to Rs.1000. Paisa coins valuing 25p and 50p are rarely used. A unique feature of the Indian rupee note is its language panel, which depicts what that denomination is called in 15 of the 22 official national languages of India.