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1 Chapter 1 : History of the Indian Rupee - General Knowledge for Kids Mocomi 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. The rupee in your pocket has a mysterious past. Behind Mahatma Gandhi's smiling face lies a long history of. History of Indian currency: How the rupee changed Updated: Nov 28,, ET traces the history of rupee from the British era to now. It owes its origin to rupiya, issued by Sher Shah Suri in It remained in use during the Mughal period, Maratha era and British India. Rs 1 was first introduced on 30 Nov, followed by Rs 2 and 8 annas, and was discontinued on 1 Jan Mar Rs 2 introduced First post-independence coins issued in 1 pice, 1. Oct Rs note introduced due to the growing economy and fall in purchasing power. This series has replaced all notes of the Lion capital series. A changed watermark, windowed security thread, latent image and intaglio features for the visually handicapped were the new features. New series of 50 paise coins and Rs 1, Rs 2, Rs 5 and Rs 10 notes with the new rupee symbol introduced. Nov Rs and Rs 1, notes discontinued and new Rs and Rs 2, notes introduced. When notes and coins were withdrawn in the past. The preindependence british series The Paper Currency Act of gave the British government the monopoly to issue notes in India. These were unifaced, carried two language panels and were printed on hand-moulded paper. Underprint series In, the Victoria Portrait series, withdrawn due to forgeries, was replaced by this series. Initially, notes were legally encashable only in the Currency Circle in which they were issued, but in, Rs 5, Rs 10, Rs 50 and Rs were universalised. Small denomination notes Paper currency of small denominations was started due to the first World War, with Rs 1 introduced on 30 November This continued till when the Reserve Bank of India was set up. Page 1

2 Chapter 2 : HISTORY OF MONEY The history of the Rupee traces back to the Ancient India in circa 6th century BC. Ancient India was the earliest issuers of coins in the world, along with the Chinese wen and Lydian staters. This had severe consequences in the nineteenth century when the strongest economies in the world were on the gold standard. This event was known as "the fall of the rupee. The silver rupee continued as the currency of India through the British Raj and beyond. In, British India adopted a mono-metallic silver standard based on the rupee; this decision was influenced by a letter written by Lord Liverpool in extolling the virtues of mono-metallism. Chart showing exchange rate of Indian silver rupee coin blue and the actual value of its silver content red, against British pence. In an attempt to make the British gold sovereign the "imperial coin", the treasuries in Bombay and Calcutta were instructed to receive gold sovereigns ; however, these gold sovereigns never left the vaults. As the British government gave up hope of replacing the rupee in India with the pound sterling, it realised for the same reason it could not replace the silver dollar in the Straits Settlements with the Indian rupee as the British East India Company had desired. Since the silver crisis of, a number of nations adopted the gold standard; however, India remained on the silver standard until it was replaced by a basket of commodities and currencies in the late 20th century. Thus a channel for the outflow of silver was stopped, in, by the India Council in London. But during the First World War, the value of the pound fell alarmingly due to rising war expenses. At the conclusion of the war, the value of the pound was only a fraction of what it used to be prior to the commencement of the war. It remained low until, when the then Chancellor of the Exchequer finance minister of the United Kingdom, Winston Churchill, restored it to pre-war levels. As a result, the price of gold fell rapidly. While the rest of Europe purchased large quantities of gold from the United Kingdom, there was little increase in her gold reserves. This dealt a blow to an already deteriorating British economy. The United Kingdom began to look to its possessions as India to compensate for the gold that was sold. Thus, in â 32, there were net exports of 7. In the following year, both the quantity and the price rose further, net exports totaling 8. In the ten years ended March, total net exports were of the order of 43 million ounces In-convertibility of paper currency into coin would lead to a run on Post Office Savings Banks. It would prevent the further expansion of paper currency note issues and cause a rise of prices, in paper currency, that would greatly increase the cost of obtaining war supplies for export To have reduced the silver content of this historic Rupee coin might well have caused such popular distrust of the Government as to have precipitated an internal crisis, which would have been fatal to British success in the war. Following the independence of British India in and the accession of the princely states to the new Union, the Indian rupee replaced all the currencies of the previously autonomous states although the Hyderabadi rupee was not demonetised until Other currencies including the Hyderabadi rupee and the Kutch kori had different values. The values of the subdivisions of the rupee during British rule and in the first decade of independence were: Page 2

3 Chapter 3 : History of Indian currency: How the rupee changed - The Economic Times The word 'rupee' has been derived from the Sanskrit word rupyakam, meaning a silver coin. It owes its origin to rupiya, issued by Sher Shah Suri in Today, the Reserve Bank of India issues currency under the RBI Act ET traces the history of rupee from the British era to now. Tweet Indian Economy has successfully faced the demonetization of Rs and Rs 1, currency notes after a lot of struggles. Let us look at how the rupee changes from the British era to now. In, British East India Company had approved for the introduction of a uniform currency in India after the research by the directors of that company. The era of approved currency began only in through a formal Act. RBI history notes that silver coins had been in circulation in parts of the countries like Madras and Mumbai. Mint is a place where money is made, and they prepared a treat to the public for free coinage of the metal in India, and it was put on a monometallic silver standard. There is a wider preference for silver coins when compared to the circulation of gold coins, and the directors of the East India Company did not oppose to this broader preferences. The Act of authorized the terms of valuation as minting of gold coins of the same weight and fineness as the silver rupee, and it was valued as 15 silver coins is equal to 1 gold coin. Apart from the silver and gold coins, currency notes were also in circulation. From, the Presidency Banks of Bengal issued the currency to circulate as equal as coins. The circulation starts at Bombay from and Madras from These currencies are not national legal tender and were restricted to the Presidency towns for distribution. History of Indian Rupee An introduction of currency notes is still favored by the Members of trade bodies. Timeline of Indian Currency Reserve Bank of India is estimated. Rs 1 note was reintroduced after it discontinued on 1 Jan Rs 2 note was introduced. First post-independence coins issued in 1 paise, 1. High denomination notes are reintroduced. Such as Rs 1,, Rs 5,, and Rs 10, The rupee was decimalised and cut into naye paise. Aluminum coins like Rupees One-, Two-, three-, five- and ten-paise are introduced. Due to the lean period of the early Sixties, the size of the notes had reduced. After the economy level rises in India, Rs note had been introduced and fall in acquiring power. Stainless steel coins of 10, 25 and 50 paise are introduced. Old Indian Rupee In Stainless steel coins of Rs 1 and Rs 5 coins are introduced. The Mahatma Gandhi series of notes replaced all notes of the Lion capital series. And start issuing with Rs 10 and Rs notes. For the visually handicapped, the notes are designed under the features of changed watermark, windowed security thread, latent image, and intaglio. Stainless steel coins of New 50 paise, Rs 1, Rs 2 and Rs 5 are introduced. The printing of Rs 5 notes had resumed. Demonetisation of 25 paise coin and all paise coins below it. And new series of 50 paise coins and Rs 1, Rs 2, Rs 5 and Rs 10 notes are introduced with the new rupee symbol. Rs and Rs 1, notes discontinued and new Rs and Rs 2, notes are introduced. Rs and Rs 2, notes are introduced. Page 3

4 Chapter 4 : Indian currency: Ten lesser known facts - Education Today News The Indian rupee (sign: â ¹; code: INR) is the official currency of India. The rupee is subdivided into paise (singular paisa), though as of, coins of denomination of 50 paise or half rupee is the lowest value in use. Enjoy the Famous Daily Better than barter Money, one of the earliest and most significant inventions of civilization, is essential to the development of trade. Without it there is only barter, a relationship between two people each of whom has something which the other wants. Money which everybody wants provides an intermediary substance, enabling the seller to choose when and where he wishes to become a buyer. All primitive societies invest certain things with a special value - particularly livestock, and items of rarity or beauty. They are presented on ceremonial occasions such as weddings. The possession of large numbers of cattle or pigs is clear evidence of wealth and prestige. But these objects are not money in our sense, capable of easy use in everyday transactions. The most often quoted example of primitive money is shells - in Africa cowries and wampum in America. The small cowrie shell, deriving from the Maldive Islands in the Indian Ocean, is a treasured item in the civilizations of China and India from very early times. From India these attractive objects are carried along the trade routes to Africa. Similarly the American Indians use a small white cylindrical shell for ceremonial gifts, embroidered on to decorated belts or other ornaments. Both wampum and cowries eventually become a market currency, in the conventional sense, but only after the arrival of Europeans. The earliest currency used in commercial transactions appears in Egypt and Mesopotamia by the third millennium BC. It consists of gold bars which need to be weighed to establish their value each time they are exchanged. Later they are supplemented by gold rings for smaller sums. In about BC an extensive trade, at Ebla in modern Syria, is based on currency of this kind in silver and gold. Gold rings and ornaments, which can be worn for safe keeping as well as display, approach the ideal of a portable currency. Many poor women in India today still wear their limited wealth in this way, even when working in the fields or on the roads. Safe in the temple: Unless well hidden or protected, it is easily stolen. In early civilizations a temple is considered the safest refuge; it is a solid building, constantly attended, with a sacred character which itself may deter thieves. In Egypt and Mesopotamia gold is deposited in temples for safe-keeping. But it lies idle there, while others in the trading community or in government have desperate need of it. In Babylon at the time of Hammurabi, in the 18th century BC, there are records of loans made by the priests of the temple. The concept of banking has arrived. The metal used is electrum, a natural alloy of gold and silver found locally. The coins are bean shaped and are struck on one side with a distinguishing mark, such as the image of a lion. The underlying purpose is to ensure a stable value in this variable metal of exchange, previously traded by weight alone. A century later Croesus, king of neighbouring Lydia and famous for his wealth, becomes the first ruler to mint coins in pure gold and pure silver. Like the earlier coins, his are still stamped on just one side. They show the facing heads of a lion and a bull. Greek cities, to the west of Lydia, and the great Persian empire to the east are quick to adopt the useful new technique of metal currency. By the end of the 6th century coinage is common throughout the region. In distant Rome, as yet more backward, unworked lumps of bronze are now in use as currency. The Roman word for money, pecunia, derives from pecus, meaning cattle. Bronze coins in China: While the craftsmen of Ephesus are striking coins in Asia Minor, the skilled casters of China are making coins by a different method - pouring molten bronze into moulds. The results look very different. The Chinese bronze-casters, accustomed to turning out elaborate shapes for ritual vessels, incline to something more complex than a simple round coin. Two shapes in particular are characteristic of the first Chinese coins. Coins of one type resemble the metal part of a spade, while others are like a knife blade with a handle. In both cases the flat surfaces are decorated with Chinese characters. These designs are copied in nearly all the states of China during the later centuries of the Zhou dynasty. Shi Huangdi, the first emperor of China, introduces the more rational round coin in the late 3rd century BC. Still cast in bronze rather than struck, they have a square hole in the middle - a shape characteristic of far eastern coins for the next two millennia. Greek and Roman financiers: Private entrepreneurs, as well as temples and public bodies, now undertake financial transactions. They take deposits, make loans, change money from one currency to another and test coins for Page 4

5 weight and purity. They even engage in book transactions. Moneylenders can be found who will accept payment in one Greek city and arrange for credit in another, avoiding the need for the customer to transport or transfer large numbers of coins. Rome, with its genius for administration, adopts and regularizes the banking practices of Greece. By the 2nd century AD a debt can officially be discharged by paying the appropriate sum into a bank, and public notaries are appointed to register such transactions. The collapse of trade after the fall of the Roman empire makes bankers less necessary than before, and their demise is hastened by the hostility of the Christian church to the charging of interest. Usury comes to seem morally offensive. The stable currency of the Byzantine empire is a gold coin, the solidus, linked in later history with the various forms of European shilling. From about it is joined as a hard currency by another gold coin, the dinar from the Latin denarius, first minted by the caliph Abd-al-Malik in Damascus in about In the following century the Frankish king Pepin III introduces a silver denarius, or penny, which becomes the standard medieval coin in western Europe. Later kings of the Carolingian dynasty standardize the penny, decreeing that are to be struck from a pound of silver. It is subsequently established that twelve silver pennies are to be considered the equivalent of the Byzantine gold solidus or shilling. Thus there evolves a monetary scale of 1: At first the silver penny is the only local currency of the three. The shilling is a Byzantine gold coin used as a yardstick of value, while the pound is a measure of weight. Shillings and pounds later become European coins in their own right. One of the most resonant names among modern currencies, that of the dollar, derives from a somewhat later coin - the large silver Joachimsthaler, widely known as the thaler, which is minted from in Bohemia and is named from the silver mines at Joachimsthal. Paper money in China: It is a familiar currency by the end of the century under the Song dynasty. Another three centuries later it is one of the things about China which most astonishes Marco Polo see Bank notes in China. He describes in great detail how the notes are authenticated, and then unwittingly touches on the danger lurking within the delightful freedom to print money. By the early 15th century inflation has become such a problem that paper currency is abolished in the Ming empire. Sweden can claim the priority as also, a few years later, in the first national bank. In Johan Palmstruch establishes the Stockholm Banco. It is a private bank but it has strong links with the state half its profits are payable to the royal exchequer. In, in consultation with the government, Palmstruch issues credit notes which can be exchanged, on presentation to his bank, for a stated number of silver coins. If enough people trust them, these notes are genuine currency; they can be used to purchase goods in the market place if each holder of a note remains confident that he can indeed exchange it for conventional coins at the bank. Predictably, the curse of paper money sinks the project. Palmstruch issues more notes than his bank can afford to redeem with silver. By he is in disgrace, facing a death penalty commuted to imprisonment for fraud. Another half century passes before the next bank notes are issued in Europe, again by a far-sighted financier whose schemes come to naught. Public confidence in the system is inevitably shaken when a government decree, in May, halves the value of this paper currency. Throughout the commercially energetic 18th century there are frequent further experiments with bank notes - deriving from a recognized need to expand the currency supply beyond the availability of precious metals. Gradually public confidence in these pieces of paper increases, particularly when they are issued by national banks with the backing of government reserves. In these circumstances it even becomes acceptable that a government should impose a temporary ban on the right of the holder of a note to exchange it for silver. This limitation is successfully imposed in Britain during the Napoleonic wars. The so-called Restriction Period lasts from to With governments issuing the bank notes, the inherent danger is no longer bankruptcy but inflation. When the Restriction Period ends, in, the British government takes the precaution of introducing the gold standard. The Europeans, eager to trade in regions where there is no established coinage, make use of the value attached to these shells - and in doing so transform them, for a while, into a conventional currency. In both regions the result is massive inflation. The Europeans, finding they have the power to flood the market with shells, inevitably debase the currency. In America the colonists in the 18th century go to the length of inventing a machine which can manufacture white shell beads accepted as wampum by their Indian trading partners. The African market is even more easily flooded with shell currency. Cowries, previously brought with difficulty to India and then overland through Africa, are now imported in shiploads by Dutch and British ships calling at the Maldives on their way back from the far east. Page 5

6 They become a standard part of the price for slaves in west Africa. It has been calculated that during the 18th century more than 10, tons of these shells are brought round the Cape. By the price of a single slave is about, cowries. This History is as yet incomplete. Page 6

7 Chapter 5 : Indian Rupee - About, History Over the course of the millennia that have transpired since currency first came into use, the way Indians use money has undergone many transformations. A year of demonetisation has shown how there. The first " rupee " is believed to have been introduced by Sher Shah Suri â, based on a ratio of 40 copper pieces paisa per rupee. Arthashastra, written by Chanakya, prime minister to the first Maurya emperor Chandragupta Maurya c. Coinage since the British period[ edit ] The British settlements in Western India, South India, and the Eastern Province of Bengal Calcutta independently developed different coinages in consonance with the local acceptability of the coins for the purposes of trade. Crowned bust of Queen Victoria. Face value, country and date. Coin made of The coins of Bengal were developed in the Mughal style and those of Madras mostly in a South Indian style. The British gold coins were termed Carolina, the silver coins Anglina, the copper coins Cupperoon and tin coins Tinny. By the early, the English had become the dominant power in India. The Coinage Act of provided for uniform coinage throughout India. The new coins had the effigy of William IV on the obverse and the value on the reverse in English and Persian. The coins issued after bore the portrait of Queen Victoria. The first coinage under the crown was issued in and in Queen Victoria assumed the title the Empress of India. The gold silver ratio expanded during Unlike India, her colonial master Britain was on gold standard. To meet the Home Charges i. British Indian 1 rupee, The accession to the throne of the King-Emperor George V led to the famous "pig rupee". On the coin, the King appeared wearing the chain of the Order of the Indian Elephant. Through poor engraving, the elephant looked very much like a pig. The Muslim population was enraged and the image had to be quickly redesigned. Acute shortage of silver during the First World War, led to the introduction of paper currency of One Rupee and Two and a half Rupees. The silver coins of smaller denominations were issued in cupro-nickel. The compulsion of the Second World War led to experiments in coinage where the standard rupee was replaced by the "Quaternary Silver Alloy". The Quaternary Silver coins were issued from In these were replaced by pure Nickel coins. Immediately after independence, the British coinage was continued. The Monetary System remained unchanged at One Rupee consisting of 64 pice, or pies. The "Anna Series" was introduced on 15 August This was the first coinage of the Republic of India. A corn sheaf replaced the Tiger on the one Rupee coin. The monetary system was retained with one Rupee consisting of 16 Annas. The Indian Coinage Amendment Act, that came into force with effect from 1 April, introduced a "Decimal series". The "Naye Paise" coins were minted in the denominations of 1, 2, 5, 10, 20 and 50 Naye Paise. Both the Anna series and the Naye Paise coins were valid for some time. With high inflation 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 but did not gain much popularity. Over a period, cost-benefit considerations led to the gradual discontinuance of 1, 2 and 3 paise coins in the s. Stainless steel coinage of 10, 25 and 50 paise, was introduced in and of one rupee in Indian rupee Since its Independence in, India has faced two major financial crises and two consequent devaluations of the rupee: In and Page 7

8 Chapter 6 : Indian Rupee Exchange Rates - Rupee (INR) Currency Converter - India Currency History of Indian Rupee An introduction of currency notes is still favored by the Members of trade bodies. In, the Paper Currency Bill was enacted after several years of discussion, which gave the government the sole right to issue notes. Varsha Roysam Our Prime Minister, Narendra Modi, shocked us all with his announcement of the currency ban earlier this week. While there has been a mixed reception of his bold move, the ripples it has caused is undeniable. Perhaps a look into the past will help predict the future? The Indian government is not a novice when it comes to demonetisation for it has already been implemented twice in the past. Read on to see how they have fared. After only four years of Rs and Rs in circulation, the RBI in an ambitious move introduced Rs10, notes in â the highest denomination ever printed in India till date. The first currency ban occurred in when the government withdrew Rs and Rs 10, from circulation. This move was of very little consequence to the Indian population as such a large sum of money was not accessible to most â high-value notes really were of high value. Rs and Rs10, were, however, reintroduced in and Rs was introduced for the first time. To value or not to value? The early 70s saw a flurry of demonetisation rumours and their subsequent panic. The Wanchoo committee, a tax inquiry committee set up by the Planning Commission of India, had submitted a report to the Lok Sabha recommending demonetisation to counter the accumulation of black money. Because this recommendation was made publicly, the word got out. But as is always the case, the facts were twisted and the recommendation found its way to the public as a certainty. Chaos ensued as black money hoarders acted quickly to hide their tracks. With rumours going around that Rs was being removed from circulation, banks saw a rush of people, similar to what we see now, as people hoarded to exchange Rs. The government denied any consideration of demonetisation proposals that came their way. The government is, however, constantly engaged in detecting tax evasion, which is the principal source of undisclosed money. Like Modi, his aim was to choke the counterfeit and black money circulating in the economy. G Patel believed the currency ban was put in effect simply to cripple the funds of the opposition party. On January 16, Desai demonetised Rs, Rs and Rs 10, notes and announced the currency ban over the radio. Patel, however, was of the opinion that demonetisation would not be very effective in curbing black money as most people who do collect it never keep it in currency form for too long. Sure enough, it was seen that the demonetisation effort had no real effect on the circulation of black money, as Abhiroop Sarkar from The Indian Statistical Institute noted. Black money hoarders on the other hand, are feeling the heat. But the role that this currency ban will play in the future of corruption control is yet to be seen. Page 8

9 Chapter 7 : From coins to notes: Amazing journey of Indian money - racedaydvl.com Business History of Indian Paper Money - Rezwan Razack. History of Indian Paper Money - Rezwan Razack. Skip navigation Sign in. INDIAN HISTORY - Great Religions of the World - Buddhism. A year of demonetisation has shown how there has been a push towards a digital economy, but the love for cash refuses to fade. From cowrie shells and gold coins to paper notes and the modern digital methods â the history of payments in India is varied and intriguing. As the RBI rolls out the Rs 50 and Rs denominations in the Indian currency system, we trace its evolution from the earliest days of recorded history. Early currencies Cowrie shells, found abundantly in the Indian Ocean, were among the earliest forms of currency used in the world. In India, they were colloquially referred to as kaudi and were used in certain areas like Odisha even until the early s. The Indo-Greek kings then introduced new types of coins that would influence Indian coinage for many centuries to come. The Kushan empire, which existed from the first to third centuries CE, began minting gold coins which featured mythological deities. Coins continued to take on various forms through the subsequent dynasties in India â from the Rajput and Mughal empires in the North to the Maratha and Vijayanagara kingdoms in the South. It was Sher Shah Suri who, during his five-year rule from, introduced to the nation a new currency which is the ancestor of the modern-day Rupee. After defeating Humayun and taking over the Mughal Empire in, Suri set up a new civic and military administration that issued a silver coin termed the Rupiya, which remained in circulation even during the remainder of the Mughal Period as well as during the Maratha era. But the coins issued in Western India Bombay and Surat and South India Madras provinces differed from their northern counterparts in both design and metrology. Cowrie shells top were some of the first forms of currency used in India, before being replaced by silver and gold coins, such as these ones from the Maurya dynasty bottom. The issuance of a uniform coinage in India was brought about only in the early 19th century when the English, who were now the dominant power in the country, enacted the Coinage Act of The newly-designed coins saw the traditional Indian images and symbols replaced with the effigy of King William IV, which was itself replaced by the portrait of Queen Victoria from onwards. However, it was only after the Indian Rebellion of, also known as the Sepoy Mutiny, that the British declared the Rupee as the official currency of colonial India. When cash was crowned king Coins initially derived their value from the precious metal used to mint them. This posed a problem for sovereigns who did not possess the requisite gold or silver to prevent a drastic devaluation of their currency. Paper money solved this problem as it bore a promise to pay its possessors the equivalent value of gold or silver from the public treasury. Soon, it no longer mattered that paper money was not backed by anything of tangible value, and it was simply accepted as a medium of exchange for goods and services. But while paper currency was popularised in Asia by Genghis Khan as early as the 11th century, it only gained traction in India a few centuries later. In the late 18th century, silver and gold coins gave way to hundis, bonds, and shares, and paper currency was introduced in India for the first time. Both private and semi-government Presidency banks could print notes â the General Bank of Bengal and Bihar and The Bank of Hindostan were among the earliest issuers of paper currency in India. In, the Government of India enacted the Paper Currency Act which granted it a monopoly over the issue of notes and ended the issuance of notes by private and Presidency Banks. The Indian Independence Movement soon began gathering steam, and its nationalist and economic strategy arm, the Swadeshi Movement, made a big impact on Indian banking. Inspired by the message of reviving domestic processes and products, businessmen and politicians founded several local banks â Canara Bank, Bank of India, Corporation Bank, Indian Bank, and Bank of Baroda, to name a few â for the Indian community from to Soon after, the British Empire faced an acute shortage of silver due to the outbreak of World War I in and hence began issuing paper currency of smaller denominations one and two Rupees hitherto issued only as coins. Meanwhile, India got its first printing press in Nashik in which soon began printing currency for the entire country. The rupee underwent several iterations under British rule, including this ten rupee note from the s top and this one rupee coin from bottom. The First World War left the Indian economy in dire straits, and the need for an apex monetary authority was identified. The Central Legislative Assembly, acting on the Page 9

10 guidelines recommended by the Royal Commission of Indian Currency and Finance, set up the Reserve Bank of India to separate the control of currency and credit from the government and to regulate banking and note issuance throughout the country. A year later, the apex bank issued its first series of notes which now bore a portrait of the new British monarch â George VI. The Five Rupee note was the first one to be issued in this series and Rs. Under this law, the Indian Parliament halted the use of high-denomination banknotes of Rs. It was in that the first notes bearing the picture of Mahatma Gandhi were printed. These notes, which featured upgraded security measures and tangible aids for the visually impaired, remain in circulation even today, with the exception of the Rs and Rs 1, notes which were replaced after the Demonetisation. Keen to restore economic welfare in India, the government sought to create a mixed economy as opposed to the laissez-faire system which had existed thus far. Since the banks in India, with the exception of the State Bank of India, were owned by private entities, the government led by the then prime minister Indira Gandhi decided to nationalise the banking industry. In, the government further nationalised six more commercial banks after which it controlled around 91 percent of the Indian banking industry. The Indian banking sector underwent yet another upheaval a decade later. Facing an economic crisis in â caused in large part due to the USSR collapse and the Gulf War â India introduced liberalisation policies that allowed the entry of private banks into the country. In September alone, they accounted for Rs 2,42, crores in transactions. Credit and debit card users, meanwhile, accounted for Rs 74, crores in transactions at Point of Sale PoS. Computerisation first entered the Indian banking industry in, and internet banking in the s. A digital economy While NEFT and other forms of online payment required a computer and often featured lengthy transaction times, the new wave of e-payments brought about by digital wallets has made transferring money a lot easier and quicker. Since internet availability and smartphone usage have become virtually ubiquitous, e-wallets like PayU, Paytm, and MobiKwik are being used by millions for financial transactions, both personal and commercial. The demonetisation move by the Narendra Modi-led government saw a sharp uptake in cashless transactions in November and December â mobile wallet transactions recorded a percent rise, Point of Sale PoS transactions an 88 percent rise, and mobile banking transactions a 30 percent rise. From November to May, the total digital transactions in India went up by 23 percent, from But in a country whose economy was 90 percent cash-reliant pre-demonetisation, cash remains the most commonly used medium for financial transactions. Cash withdrawals, which were at a low of Rs billion in November, increased to Rs 2, billion in March Pre-demonetisation in October and September, this was at Rs 2, billion and Rs 2, billion respectively. Unlike digital payments, which rely on a steady internet connection and acceptance from both buyer and seller, cash is quick, easy, and instantly available for further offline transactions. That makes it the mode of payment of choice for Indians right now. This is unlikely to change until the digital infrastructure in the country is improved to the extent that every Indian, no matter how remote their location, can make digital transactions as easily as they can pay with cash. Digital payments themselves are evolving with the inception of cryptocurrency. Since they are a decentralised and highly secure form of money, currencies like Bitcoin, Ethereum, and Monero are rapidly gaining popularity around the world. Page 10

11 Chapter 8 : History of the rupee - Wikipedia History of the Indian Rupee - Sher Shah Suri was the guy responsible for the Rupee. His version of 1 Re in AD weighed grams of silver and was divided into 40 copper pieces or paisa. Share Loading the player Money, in and of itself, is nothing. It can be a shell, a metal coin, or a piece of paper with a historic image on it, but the value that people place on it has nothing to do with the physical value of the money. Money derives its value by being a medium of exchange, a unit of measurement and a storehouse for wealth. Money allows people to trade goods and services indirectly, understand the price of goods prices written in dollar and cents correspond with an amount in your wallet and gives us a way to save for larger purchases in the future. To learn more about money itself, see What Is Money? A World Without Money Money, in some form, has been part of human history for at least the last 3, years. Before that time, it is assumed that a system of bartering was likely used. One of the great achievements of money was increasing the speed at which business, whether mammoth slaying or monument building, could be done. Slowly, a type of prehistoric currency involving easily traded goods like animal skins, salt and weapons developed over the centuries. These traded goods served as the medium of exchange even though the unit values were still negotiable. This system of barter and trade spread across the world, and it still survives today on some parts of the globe. Asian Cutlery Sometime around 1, B. Nobody wants to reach into their pocket and impale their hand on a sharp arrow so, over time, these tiny daggers, spades and hoes were abandoned for the less prickly shape of a circle, which became some of the first coins. Although China was the first country to use recognizable coins, the first minted coins were created not too far away in Lydia now western Turkey. Coins and Currency In B. The coins were made from electrum, a mixture of silver and gold that occurs naturally, and stamped with pictures that acted as denominations. In the streets of Sardis, circa B. It is interesting that when someone says, "as rich as Croesus", they are referring to the last Lydian king who minted the first gold coin. By the time Marco Polo visited in 1, A. In the place of where the American bills say, "In God We Trust," the Chinese inscription warned, "All counterfeiters will be decapitated. Eventually, the banks started using bank notes for depositors and borrowers to carry around instead of coins. These notes could be taken to the bank at any time and exchanged for their face values in silver or gold coins. This paper money could be used to buy goods and operated much like currency today, but it was issued by banks and private institutions, not the government, which is now responsible for issuing currency in most countries. The first paper currency issued by European governments was actually issued by colonial governments in North America. Because shipments between Europe and the colonies took so long, the colonists often ran out of cash as operations expanded. Instead of going back to a barter system, the colonial governments used IOUs that traded as a currency. The first instance was in Canada, then a French colony. In, soldiers were issued playing cards denominated and signed by the governor to use as cash instead of coins from France. Money Travels The shift to paper money in Europe increased the amount of international trade that could occur. Banks and the ruling classes started buying currencies from other nations and created the first currency market. Mobile Payments The 21st century gave rise to two disruptive forms of currency: Mobile payments and virtual currency. A mobile payment is money rendered for a product or service through a portable electronic device such as a cell phone, smartphone or PDA. Mobile payment technology can also be used to send money to friends or family members. Increasingly, services like Apple Pay and Samsung Pay are vying for retailers to accept their platforms for point-of-sale payments. Virtual currencies have no physical coinage. The Bottom Line Despite many advances, money still has a very real and permanent effect on how we do business today. Trading Center Want to learn how to invest? Get a free 10 week series that will teach you how to start investing. Delivered twice a week, straight to your inbox. Page 11

12 Chapter 9 : History Of Indian Currency, Old Currencies Of India, Lead Coins, Silver Base Coins A short history of years of paper currency in India By Maria Thomas November 11, Knowing that the current Rs and Rs1,denominated notes are now a relic of the past makes you look at. The uninscribed punch marked coins were probably minted from 6th century BC onwards. Among the earliest silver specimen are those in the shape of small bar, the largest of which sataman weighted grains. The basic silver punch marked coin was Karsapana or pana of In the punch marked copper coins, a masa of 9 grains and a karshapana of grains, quarter masas in copper or kakini were in circulation. In the Kushana period, the dinaras or suvarnas were based on the Roman Denarius and were of grains. The copper coins were larger of from 26 to 28 masas or to grains. The Satvahanas issued lead coins and potin with silver base coins. In Pre-Gupta and Gupta period the gold coins were called Dinaras derived from Kushanas with a weight of grains. The silver coin was called Rupaka based on Sakas of Ujjaini weighing grains. According to Fa-Hsien cowries were very common means of exchange. In Delhi Sultanate gold coins were called Tanka which were equivalent to the Greek drachm standard of 67 grains. The silver coins were called drama. The earliest gold issued in the name of Muzuddin Mohd Bin Sam with conventionalized usage of goddess lakshmi on the obverse and the name of the ruler in Nagari characters on the reverse. Thakuura Pheru under Mubarak Khilji left a valuable treatise written in Apabhramasa regarding exchange rate. Pure silver coins were extremely scarce and were prevalent only in Bengal. Ibn Batuta mentions that in 80 rati tanka replaced silver tanka and cowaries were prevalent. The coins of Sultan Illutmish bear Sanskrit inscription. During Lodi dynasty Sikandari a copper coin with small silver alloy and Ruppayya a silver coin were used. During Sher Shah, rupaya basically of copper was used. One ruppaya was equivalent of grains. During the Mughals Muhr or ashrafi of grain was prevalent, dam was grains and was of copper. Page 12