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August 21, 2018 Currency Exchange
4 minutes, 44 seconds Read

The Complete History of Indian Rupee — from 712 AD till date


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History of Indian Rupee — from 712 AD till date. The history of the Indian rupee traces back to Ancient India in circa 6th century BCE, ancient India was one of the earliest issuers of coins in the world, along with the Chinese wen and Lydian staters.

History of Indian Rupee

‘Rupee’ comes from the Sanskrit word rupyakam which means a silver coin. The word “rupaalu” means wrought silver or a coin of silver in Sanskrit. Another word ‘rupaalu’ is an adjective and means ‘shapely’, and was used for a piece of silver that was ‘stamped or impressed’ like a coin is or was. This word ‘rupaalu’ comes from the noun ‘rūpa’ which means “shape, likeness, image”. The word rūpa itself may have Vedic or Dravidian roots. The origins are more likely to be Vedic as the Sanskrit word rūpa is a noun, means a form, beauty (Rigveda). The word rūpaka is adjective and means a particular coin. Rūpya and rūpiya are adjectives and mean something beautiful and bearing a stamp(Pāṇini)

Arthashastra, written by Chanakya, prime minister to the first Maurya emperor Chandragupta Maurya (c. 340–290 BCE), mentions silver coins as rupyarupa, other types including gold coins (Suvarnarupa), copper coins (Tamararupa) and lead coins (Sisarupa) are mentioned. Rupa means a form or shape, example, Rupyarupa, Rupya – wrought silver, rupa – form. (Source: Subodh Kapoor (January 2002). 

The current rupee owes its origin to rupiya, issued by Sher Shah Suri in 1540-45. Today, the Reserve Bank of India issues currency under the RBI Act 1934.

A Complete Guide of the History of Indian Rupee

BookMyForex traces the History of Indian rupee from the Sher Shah Suri era to now.

Year What Happened
1540-45 Sher Shah Suri issued a Silver coin which was in use during the Mughal period, Maratha era and British India.
1770-1832 The earliest paper rupees were issued by Bank of Hindostan (1770– 1832), General Bank of Bengal and Bihar (1773–75), and Bengal Bank (1784–91).
1 Apr 1935 Reserve Bank of India is set up.
Jan 1938 Reserve Bank issues first note of Rs 5
Feb-Jun 1938 RBI issues Rs 10, Rs 100, Rs 1,000 and Rs 10,000 notes.
Aug 1940 Rs 1 note reintroduced. Rs 1 was first introduced on 30 Nov 1917, followed by Rs 2 and 8 annas, and was discontinued on 1 Jan 1926.
Mar 1943 Rs 2 note introduced
1950 RBI issues first post-Independence coins in 1 pice, 1.2, one and two annas, 1.4, 1.2 and Rs 1 denominations.
1953 Hindi language features prominently on the new notes, and plural of rupaya was decided to be rupiye
1954 High denomination notes of Rs 1,000, Rs 5,000, and Rs 10,000 reintroduced.
1957 Rupee is decimalised and divided into 100 naye paise.
1957-67 Aluminium coins of denomination of one, two-, three-, five- and ten-paise are introduced.
1967 Note sizes reduce due to the lean period of the early Sixties.
1980 New notes issued with symbols of science & tech (Aryabhatta on Rs 2 note), progress (oil rig on Rs 1 and farm mechanisation on Rs 5) and Indian art forms on Rs 20 and Rs 10 notes (Konark wheel, peacock).
Oct 1987 Rs 500 note introduced due to the growing economy and fall in purchasing power
1988 Stainless steel coins of 10, 25 and 50 paise introduced.
1992 Rs 1 and Rs 5 coins in stainless steel introduced
1996 The Mahatma Gandhi series of notes issued, starting with Rs 10 and Rs 500 notes. 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.
2005-8 New 50 paise, Rs 1, Rs 2 and Rs 5 stainless steel coins introduced.
2009 The printing of Rs 5 notes (which had stopped earlier) resumed.
July 2010 New symbol ‘₹’ is officially adopted
2011 25 paise coin and all paise coins below it demonetised. New series of 50 paise coins and Rs 1, Rs 2, Rs 5 and Rs 10 notes with the new rupee symbol introduced.
2012 New ‘₹’ sign is incorporated in notes of the Mahatma Gandhi series in denominations of Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1,000
Nov 2016 Rs 500 and Rs 1,000 notes discontinued and new Rs 500 and Rs 2,000 notes introduced.

History of Indian Rupee—Demonetisation

Demonetisation is when currency notes and coins are withdrawn. The reasons given in the past were to curb and control black money or to introduce new notes.

Time Period. What Happened
12 Aug 1946 Rs 500, Rs 1,000 and Rs 10,000 notes were demonetised to control black money.
1954 High denomination notes of Rs 1,000, Rs 5,000, and Rs 10,000 reintroduced.
16 Jan 1978 Denominations higher than Rs 100 demonetised again to control the menace of black money.
1987 & 2000 While Rs 500 note was issued in 1987, the Rs 1,000 note was reintroduced in the year 2000
1995 Rs 1 and Rs 2 notes were removed from circulation.
2011 25 paise and all paise coins below this denomination were withdrawn.
Nov 2016 Rs 500 and 1000 notes were withdrawn.

History of Indian Rupee—Pre-independence (British Era)

Following were the note series that the British introduced in India:

1: The pre-independence British series
British Parliament introduces the Paper Currency Act of 1861. This gives the British government the monopoly to issue notes in India.

2: Victoria portrait series
This series comprised the first British India notes—Rs 10, Rs 20, Rs 50, Rs 100, Rs 1,000. These were uniface, with two language panels. These notes were printed on a hand-mould paper.

3: Underprint series
The Victoria Portrait series was withdrawn In 1867, the British Government withdrew Victoria Portrait series. The main reason for the change was to prevent forgeries. You were able to encash these notes legally in the Currency Circle in which they were issued. But in 1903-11, Rs 5, Rs 10, Rs 50 and Rs 100 were made available for all.

4: Small denomination notes
The reason to start paper currency of small denominations was due to the World War I. On 30 November 1917, British introduce Rs 1.

5: King’s portrait series
This series carried the portrait of George V and started in May 1923 with Rs 10 note. Other notes included Rs 5, Rs 10, Rs 50, Rs 100, Rs 500, Rs 1000, and Rs 10,000. This continued till 1935 when the Reserve Bank of India was set up.

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