Saturday 17 December 2016

History of paper currency in India

It's now been almost 40 days of announcement of demonetisation. On 8th November 2016, our honorable PM Narendra Modi has announced the banning of notes of Rs.500 & Rs.1000 which also preceded the introduction of new notes of Rs. 2000. Many of us saw the 'Mahtma Gandhi' on one side of notes. Though Reserve Bank of India (RBI) introduced an updated version of notes. So let's know more about the history of paper currency in India.


Evolution of Money

Until the 18th century, silver and gold coins were commonly used in India. But as private European trading companies established their own banks in the region, such as Bank of Hindostan in Calcutta, they began issuing the early versions of India paper notes which were initially just text-based. This further popularised the use of paper notes. The Bank of Bengal went on to release notes that featured a small image of a female figure meant to represent the idea of ''commerce'' as well as bank's name and the denominations in three scripts : Urdu, Bengali, Dev Nagri.
After the Paper Currency Act of 1861, British colonial government got really involved in producing money. Till then money was issued by state alone, not by banks. The 1861 Act was the brainchild of James Wilson, finance member of Indian council & finance minister of colonial government. In 1843, he also founded ''The Economist newspaper'' & founder of ''Standard Chartered Bank''.

''Victoria Portrait Series'' is very first paper notes officially introduced by government in the denominations of Rs.10, Rs.20, Rs.50, Rs.100, Rs.500 & Rs.1000. Notes detail provided in two languages. Interestingly when money had to be securely transferred across distances, paper notes were sometimes cut in half, with one half being sent by post first & second half sent only after the first reached the destination.

As British era past down, the styles, colors and features of paper money had also evolved starting with George V in 1923. All these notes were printed by Bank of England until India's first currency printing press was established in Nasik in 1928. After 4 years, this press was producing all of India's paper currency. In 1935, RBI came into the picture & change all the scenario.


Updated Version of Money

RBI took several years to launch its own notes due to many reasons. In 1938, RBI's first note was issued featured a portrait of King George VI. After Independence in 1947, India demands for a new notes with new look & with new identity. First pure Indian note came out in 1949. This was Re.1 note which had image of Lion capital of Ashoka at Sarnath which also become the official emblem of India. Over the next few years, RBI released notes of different denominations featuring different images like Mumbai's Gateway of India & Brihadeeswara temple in Tamil Nadu's Thanjavore town. In 1960's notes began to print in different colors to help those who cannot read. This time RBI motifs oriented towards Indian art forms & symbol of scientific and economic progress.

Here is the link of RBI money museum where one can see all types of Indian notes ever produced in Indian history.
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