The interesting journey of the Indian currency system
You must have heard a father saying to his son or daughter in a typical Hindi movie, “Main tujhe ek phooti cowrie nahin doonga” or “Tujhe ek dhele ka kaam nahin aata?” Actually, these common Bollywood lines refer to our ancient Indian currency system when rupee didn’t exist. The notes that we have today with the smiling face of Mahatama Gandhi came into the picture much after India’s independence. Let’s understand how Indian currency has evolved over the ages into the rupee of today.
The first coins
The first Indian coins were minted in the 6th century BC by the Mahajanapadas (republic kingdoms) of ancient India. These kingdoms - Gandhara, Kuntala, Kuru, Panchala, Shakya, Surasena, and Saurashtra – punch-marked their coins called Puranas, Karshapanas or Pana. These were made of silver with a standard weight and irregular shapes. In fact, the markings varied according to the kingdom. For example, Saurashtra had a humped bull.
Evolution under various dynasties
The Mauryas who came next, punch-marked their coins with a royal standard. In his Arthashastra treatise, Chanakya, counsellor and adviser to the first Mauryan emperor Chandragupta Maurya, mentioned the minting of coins as rupyarupa (silver), suvarnarupa (gold), tamararupa (copper) and sisarupa (lead).
Kushan kings of Indo-Greek origin came next and introduced the Greek practice of engraving coins with portrait heads, a custom which continued for many centuries. They would have a helmeted bust of the king on one side, and his favourite deity on the other side.
When the Gupta empire took over, they produced large numbers of gold coins with intricate engravings of Gupta kings performing various rituals on the coins, a tradition that continued till the Turkish Sultanate came to North India.
After Turkish Sultans came to Delhi they replaced the royal designs of Indian kings with Islamic calligraphy by the 12th century AD and the currency was now called tanka - made in gold, silver and copper. They also issued coins of different values.
The launch of Rupiya
The Mughal empire, which started ruling India during the 16th century, established a unified and consolidated monetary system for the entire empire. Sher Shah Suri of the Islamic Sur dynasty, after defeating Mughal emperor Humayun, in 1539 anf 1540, set up a new civic and military administration and issued a coin of silver, weighing 178 grains. This was termed as ‘rupiya’ that was divided into 40 copper pieces or paisa. Silver coins remained in use during the remaining Mughal period.
So what happened when the Britishers came in the 1600s? By that time silver rupiya had already become the established standard currency in India. Though the Britishers tried to introduce the sterling pound in India, they failed and rupiya became more and more popular and was even exported as a currency.
Indian Coinage Act & RBI
The Britishers obtained permission from the Mughals to mint coin and the first rupee coin of the East India Company was minted in 1757. Paper money was first issued in British India in the 18th century.
By early 1830, the English had become the dominant power in India and enabled the enactment of the Coinage Act of 1835 for uniform coinage to be issued. The newly designed coins were issued in 1835 with the effigy of William IV on one side and the value on the other in English and Persian. In 1862, a series of banknotes and coins with Victoria portrait were issued in honour of Queen Victoria and later, many emperors followed suit.
It was only in 1935 that the Reserve Bank of India was set up and could issue Government of India notes. Do you know the first paper currency issued by RBI was in 1938? It was a 5 rupee note bearing King George VI’s portrait.
Post-independence Era & Indian Coinage
After India gained independence in 1947, its monetary system remained unchanged atleast for some time and a rupee consisted of 64 pice. The first banknote printed by independent India was a 1 rupee note.
Three years later in August 1950, a new anna system was issued, the first coinage of the Republic of India. The engraving of Ashoka’s Lion Capital of Sarnath replaced the British King’s portrait, and the tiger on the 1 rupee coin was replaced with a corn sheaf.
According to this new system, one rupee (rupiya) was made up of 16 annas or 64 paisa. There were others denominations too. Three phooti cowries made a cowrie — made of seashells; 10 cowries made a damri; two damris made a dhela; two dhelas made a paisa! And this is where you get all your proverbs from!
The Naye paise and new symbol for Rupee
This also changed soon. In 1957, as per an amendment in the Coinage Act, a ‘decimal series’ was introduced. The rupee or rupiya was now divided into 100 paisa instead of 16 annas. But how to differentiate between the old rupiya and new rupiya? So, to make it simpler, the new coins were called naye paise or new paise.
The new coins also had distinctly different shapes so that the blind could figure out the denomination from the shape. For example, 1 naya paisa had a round shape, 2 naya paisa had a scalloped edge, 5 naya paisa was made in a square and so on.
Since then many denominations have been discontinued and new ones added. In 2010, India adopted the new symbol for the rupee ₹, and new coins bearing this symbol were launched in 2011.