Review On History Of India Paper Money

  • Dr (Ms) Swaroopa Rani N. Gupta


Paper Money, in the modern sense, traces its origins to the late eighteenth century with the issues of private banks as well as semi-government banks. The Paper Currency Act of 1861 conferred upon Government of India the monopoly of Note Issue bringing to an end note issues of Private and Presidency Banks. Government of India continued to issue currency notes till the Reserve Bank of India was established on 1st April, 1935. When the one rupee note was reintroduced as a war time measure in August, 1940, it was issued by Government of India with the status of a coin.


Paper Money, as we know it today, was introduced in India in the late Eighteenth Century. This was a period of intense political turmoil and uncertainty in the wake of the collapse of the Mughal Empire and the advent of the colonial powers. The changed power structure, the upheavals, wars, and colonial inroads led to the eclipse of indigenous bankers, as large finance in India moved from their hands to Agency Houses who enjoyed state patronage. Many agency houses established banks. Among the early issuers, the General Bank of Bengal and Bahar (1773-75) was a state sponsored institution set up in participation with local expertise. Its notes enjoyed government patronage. Notes issued by the Bank of Bengal can broadly be categorised in 3 broad series viz: the 'Unifaced' Series, the 'Commerce' Series and the 'Britannia' Series. The early notes of the Bank of Bengal were unifaced and were issued as one gold mohur (sixteen sicca rupees in Calcutta) and in denominations deemed convenient in the early 19th Century, viz., Rs. 100, Rs. 250, Rs. 500, etc.


British India Issues commence with the Paper Currency Act of 1861 which gave the Government the monopoly of note issue in India. The management of paper currency across the geographical expanse of the Indian sub-continent was a task of considerable proportions. Initially the Presidency Banks were appointed as agents to promote the circulation of these notes in view of their existing infrastructure. The Act of 1861 authorised the Presidency Banks to enter into agreements with the Secretary of State for becoming agents for the issue, payment and exchange of promissory notes of the Government of India. The problem of redemption of these notes over vast expanses of the Indian sub-continent led to the concept of 'Currency Circles', where these notes were legal tender.


The first set of British India notes were the 'Victoria Portrait' Series these were unifaced, carried two language panels and were printed on hand-moulded paper manufactured at the Laverstock Paper Mills (Portals). The security features incorporated the watermark (GOVERNMENT OF INDIA, RUPEES, two signatures and wavy lines), the printed signature and the registration of the notes. 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. The Victoria Portrait series was withdrawn in the wake of a spate of forgeries and replaced by the unifaced 'Underprint Series' which were introduced in 1867. The Underprint Series notes were printed on moulded paper and carried 4 language panels (Green Series). The languages differed as per the currency circle of Issue. Language panels were increased to 8 in the Red Series. The improved security features included a wavy line watermark, the manufacturer's code in the watermark (the source of much confusion in dating), guilloche patterns and a coloured underprint. This series remained largely unchanged till the introduction of the 'King's Portrait' series which commenced in 1923. The introduction of small denomination notes in India was essentially in the realm of the exigent. Compulsions of the first World War led to the introduction of paper currency of small denominations. These notes first carried the portrait of King George V and were the precursors of the 'King's Portrait' Series which were to follow. Regular issues of ‘King's Portrait’  Series carrying the portrait of George V were introduced in May, 1923 on a Ten Rupee Note. 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.


The Reserve Bank of India was formally inaugurated on Monday, April 1, 1935 with its Central Office at Calcutta. The Republic, however, was established on 26th January, 1950. In 1953, Hindi was displayed prominently on the new notes.  With the advancement of reprographic techniques, traditional security features were deemed inadequate. It was necessary to introduce new features and a new 'Mahatma Gandhi Series' was introduced in 1996. A changed watermark, windowed security thread, latent image and intaglio features for the visually handicapped are amongst the new features.


This paper deals with review on History of India Paper Money which includes India paper money a retrospect 1770-1998; Early Issues - Unifaced Series, Commerce Series, Brittania Series; British India issues - Victoria Portrait Series, Underprint Series, Small Denomination Notes, King's Portrait Series; British India Reserve Bank issues; Republic India issues - Mahatma Gandhi Series; Other issues - Indo-French Issues, Jammu & Kashmir Issues, Hyderabad Issues, Emergency Issues Princely States Cash Coupons, Burma Issues, Persian Gulf Issues, Haj Issues.