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Indian rupee
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The rupee (code: INR) is the currency of India. The issuance of the currency is controlled by the Reserve Bank of India. The most commonly used symbols for the rupee are Rs, ? and ??. The ISO 4217 code for the Indian rupee is INR. On 5 March 2009 the Indian Government announced a contest to create a symbol for the Rupee. The modern rupee is subdivided into 100 paise (singular paisa).
In most parts of India, the rupee is known as the rupee, Rupiya (hindi) roopayi, rubai, roopa or one of the other terms derived from the Sanskrit rupyakam (Devnagari: ???????), raupya meaning silver; rupyakam meaning (coin) of silver.
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The rupee (code: INR) is the currency of India. The issuance of the currency is controlled by the Reserve Bank of India. The most commonly used symbols for the rupee are Rs, ? and ??. The ISO 4217 code for the Indian rupee is INR. On 5 March 2009 the Indian Government announced a contest to create a symbol for the Rupee. The modern rupee is subdivided into 100 paise (singular paisa).
In most parts of India, the rupee is known as the rupee, Rupiya (hindi) roopayi, rubai, roopa or one of the other terms derived from the Sanskrit rupyakam (Devnagari: ???????), raupya meaning silver; rupyakam meaning (coin) of silver. However, in West Bengal, Tripura, Orissa, and Assam, the Indian rupee is officially known by names derived from the Sanskrit Tanka. Thus, the rupee is called ???? Taka in Bengali, ??? tôka in Assamese, and ????? Tôngka in Oriya, with the symbol T, and is written as such on .
On 5 March 2009, the exchange rate was Rs.51.84 to US$1.
Numeral system
As is standard in Indian English, large values of Indian rupees are counted in terms of thousands, lakh (100 thousand = 105 rupees, in digits 100,000), crore (100 lakhs = 107 rupees, in digits 10,000,000) and arawb (100 crore = 109 rupees, in digits 1,000,000,000). The use of million or billion, as is standard in American or British English, is far less common.
For example, the amount INR 1,25,84,729.25 is spoken as one crore twenty-five lakhs eighty-four thousand seven hundred twenty-nine rupees and twenty-five paise (see Indian numbering system).
History
India was one of the earliest issuers of coins (circa 6th century BC). The first "rupee" is believed to have been introduced by Sher Shah Suri (1486-1545), based on a ratio of 40 copper pieces (paisa) per rupee. Among the earliest issues of paper rupees were those by the Bank of Hindustan (1770-1832), the General Bank of Bengal and Bihar (1773-75, established by Warren Hastings) and the Bengal Bank (1784-91), amongst others.
During British rule, and the first decade of independence, it was subdivided into 16 annas. Each anna was subdivided into 4 paise (also written pice) or 12 pies. Until 1815, the Madras Presidency also issued a currency based on the fanam, with 12 fanams equal to the rupee.
Historically, the rupee, derived from the Sanskrit word raupya, which means silver, was a silver coin. This had severe consequences in the nineteenth century, when the strongest economies in the world were on the gold standard. The discovery of vast quantities of silver in the U.S. and various European colonies resulted in a decline in the relative value of silver to gold. Suddenly the standard currency of India could not buy as much from the outside world. This event was known as "the fall of the rupee."
In 1898, the rupee was tied to the gold standard through the British pound by pegging the rupee at a value of 1 shilling 4 pence (i.e., 15 rupees = 1 pound). In 1920, the rupee was increased in value to 2 shillings (10 rupees = 1 pound). However, in 1927, the peg was once more reduced, this time to 1 shilling 6 pence (13? rupees = 1 pound). This peg was maintained until 1966, when the rupee was devalued and pegged to the U.S. dollar at a rate of 7.5 rupees = 1 dollar (at the time, the rupee became equal to 11.4 British pence). This peg lasted until the U.S. dollar devalued in 1971.
The Indian rupee replaced the Danish Indian rupee in 1845, the French Indian rupee in 1954 and the Portuguese Indian escudo in 1961. Following independence in 1947, the Indian rupee replaced all the currencies of the previously autonomous states. Some of these states had issued rupees equal to those issued by the British (such as the Travancore rupee). Other currencies included the Hyderabad rupee and the Kutch kori.
In 1957, decimalisation occurred and the rupee was divided into 100 naye paise (Hindi for "new paise"). In 1964, the initial "naye" was dropped. Many still refer to 25, 50 and 75 paise as 4, 8 and 12 annas respectively, not unlike the usage of "bit" in American English for ? dollar.
In March 2009 the Indian Finance Ministry launched a public competition to select a symbol for the currency.
International use
With Partition, the Pakistani rupee came into existence, initially using Indian coins, and Indian currency notes simply overstamped with Pakistan. In previous times, the Indian rupee was regarded as an official currency of other countries, including Kuwait, Bahrain, Qatar, the Trucial States (now the UAE), and Malaysia.
The Gulf rupee, also known as the Persian Gulf rupee (XPGR), was introduced by the Indian government as a replacement for the Indian rupee for circulation exclusively outside the country with the Reserve Bank of India [Amendment] Act, May 1, 1959. This creation of a separate currency was an attempt to reduce the strain put on India's foreign reserves by gold smuggling. After India devalued the rupee on June 6, 1966, those countries still using it - Oman, Qatar and what is now the United Arab Emirates (known as the Trucial States until 1971) - replaced the Gulf rupee with their own currencies. Kuwait and Bahrain had already done so in 1961 and 1965 respectively.
The Bhutanese Ngultrum is at par with the Indian Rupee and both are accepted in Bhutan. The Indian rupee is also accepted in towns of Nepalese side of Nepal-India border.
Some Indian shops in the United Kingdom have accepted Rupees. The Glassy Junction Pub in Southall is also famous for accepting Rupees as well as pound sterling.
Coins
East India Company, -1862
The three Presidencies established by the British East India Company (Bengal, Bombay and Madras) each issued their own coinages up to 1835. All three issued rupees together with fractions down to ? and rupee in silver. Madras also issued 2 rupees coins.
Copper denominations were more varied. Bengal issued 1 pie, ½, 1 and 2 paise. Bombay issued 1 pie, ¼, ½, 1, 1½, 2 and 4 paise. In Madras, there were copper coins for 2, 4 pies, 1, 2 and 4 paisa, with the first two denominated as ½ and 1 dub or and rupee. Note that Madras also issued the Madras fanam until 1815.
All three Presidencies issued gold mohurs and fractions of mohurs, including , ?, ¼ and ½ in Bengal, (a gold rupee) and ? (pancia) in Bombay and ¼, ? and ½ in Madras.
In 1835, a single coinage for the EIC was introduced. It consisted of copper , ¼ and ½ anna, silver ¼, ½ and 1 rupee and gold 1 and 2 mohurs. In 1841, silver 2 annas were added, followed by copper ½ pice in 1853. The coinage of the EIC continued to be issued until 1862, even after the Company had been taken over by the Crown.
Regal Issues, 1862-1947
In 1862, coins were introduced which are referred to as Regal issues. They bore the portrait of Queen Victoria and the designation "India". Denominations were anna, ½ pice, ¼ and ½ anna (all in copper), 2 annas, ¼, ½ and 1 rupee (silver) and 5 and 10 rupees and 1 mohur (gold). The gold denominations ceased production in 1891 while no ½ anna coins were issued dated later than 1877.
In 1906, bronze replaced copper for the lowest three denominations and in 1907, a cupro-nickel 1 anna was introduced. In 1918 and 1919, cupro-nickel 2, 4 and 8 annas were introduced, although the 4 and 8 annas coins were only issued until 1921 and did not replace their silver equivalents. Also in 1918, the Bombay mint struck gold sovereigns and 15 rupee coins identical in size to the sovereigns as an emergency measure due to the First World War.
In the early 1940s, several changes were implemented. The anna and ½ pice ceased production, the ¼ anna was changed to a bronze, holed coin, cupro-nickel and nickel-brass ½ anna coins were introduced, nickel-brass was used to produce some 1 and 2 annas coins, and the composition of the silver coins was reduced from 91.7% to 50%. The last of the regal issues were cupro-nickel ¼, ½ and 1 rupee pieces minted in 1946 and 1947.
Independent Issues, Predecimal, 1950-1957
India’s first coins after independence were issued in 1950. They were 1 pice, ½, 1 and 2 annas, ¼, ½ and 1 rupee denominations. The sizes and compositions were the same as the final Regal issues, except for the 1 pice, which was bronze but not holed.
Independent Issues, Decimal, 1957-
The first decimal issues of India consisted of 1, 2, 5, 10, 25 and 50 naye paise and 1 rupee. The 1 naya paisa was bronze, the 2, 5 and 10 naye paise were cupro-nickel and the 25 and 50 naye paise and 1 rupee were nickel. In 1964, the word naya(e) was removed from all the coins. Between 1964 and 1967, aluminium 1, 2, 3, 5 and 10 paise were introduced. In 1968, nickel-brass 20 paise were introduced, replaced by aluminium coins in 1982. Between 1972 and 1975, cupro-nickel replaced nickel in the 25 and 50 paise and the 1 rupee. In 1982, cupro-nickel 2 rupees coins were introduced. In 1988, stainless steel 10, 25 and 50 paise were introduced, followed by 1 rupee coins in 1992. Also in 1992, the 5 rupee coin was introduced.
Between 2005 and 2007, new, lighter 1, 2 and 5 rupee coins were introduced, all struck in ferritic stainless steel. The move was prompted by the melting down of older coins whose face value was less than their scrap value.
The coins commonly in circulation are 50 paise, 1, 2 and 5 rupees. Although they remain valid, 5, 10, 20 and 25 paise coins have become increasingly rare in regular usage.
The coins are minted at the four locations of the India Government Mint.
Banknotes
British India, 1861-1947
In 1861, the Government of India introduced its first paper money, 10 rupee notes. These were followed by 20 rupee notes in 1864, 5 rupees in 1872, 10,000 rupees in 1899, 100 rupees in 1900, 50 rupees in 1905, 500 rupees in 1907 and 1000 rupees in 1909. In 1917, 1 and 2½ rupees notes were introduced.
The Reserve Bank of India began note production in 1938, issuing 2, 5, 10, 100, 1000 and 10000 rupee notes, while the Government continued to issue 1 rupee notes.
Independent Issues, 1949-
After independence, new designs were introduced to remove the portrait of the King. The government continued to issue the 1 rupee note, while the Reserve Bank issued other denominations, including the 5000 and 10,000 rupee notes introduced in 1949. In the 1970s, 20 and 50 rupee notes were introduced but denominations higher than 100 rupees were demonetized in 1978. In 1987, the 500 rupee note was introduced, followed by the 1000 rupees in 2000.
Currently Circulating Notes
| Mahatma Gandhi Series |
|---|
| Image Obverse | Value | Dimensions | Main Colour | Description | Date of issue |
|---|
| Obverse | Reverse |
|---|
| | Rs. 5 | 117 × 63 mm | Green | Mahatma Gandhi | Tractor | 2002 | | | Rs. 10 | 137 × 63 mm | Orange-violet | Rhinoceros, elephant, tiger | 1996 | | | Rs. 20 | 147 × 63 mm | Red-orange | Palm trees | 2002 | | | Rs. 50 | 147 × 73 mm | Violet | Parliament of India | 1997 | | | Rs. 100 | 157 × 73 mm | Blue-green at centre, brown-purple at 2 sides | Himalaya Mountains | 1996 | | | Rs. 500 | 167 × 73 mm | Olive and yellow | Dandi March | 1997 | | < --> | Rs. 1000 | 177 × 73 mm | Pink | Economy of India | 2000 | |
The current series, which began in 1996, is called the Mahatma Gandhi series. Currency notes are printed at the Currency Note Press, Nashik, Bank Note Press, Dewas, Bharatiya Note Mudra Nigam (P) Limited presses at Salboni and Mysore and at the Watermark Paper Manufacturing Mill, Hoshangabad.
Each banknote has its amount written in 17 languages (English & Hindi on the front, and 15 others on the back) illustrating the diversity of the country. ATMs usually give Rs. 100, Rs. 500, and Rs. 1000 notes. Rs. 1000 notes are analogous to the higher valued notes of the United States dollar and the euro.
In recent years, the banknotes were slightly modified to include see through registration on the left side of obverse. In addition, the year is now printed on the reverse. EURion constellation was added to Rs. 100. The revised Rs. 10, 20 were issued in 2006, and Rs. 50, 100, 1000 in 2005. The RS. 5 notes are now stoped from being printed and are very rarely used, but they are still valid forever.
Language panel
The language panel on Indian rupee banknotes display the denomination of the note in 15 of the 22 national languages of India.
Security features
- Watermark — White side panel of notes has Mahatma Gandhi watermark.
- Security thread — All notes have a silver security band with inscriptions visible when held against light which reads Bharat in Hindi and RBI in English.
- Latent image — Higher denominational notes (Rupees 20 onwards) display the note's denominational value in numerals when held horizontally at eye level.
- Microlettering — Numeral denominational value is visible under magnifying glass between security thread and latent image.
- Fluorescence — Number panels glow under ultra-violet light.
- Optically variable ink — Notes of Rs. 500 and Rs. 1000 have their numerals printed in optically variable ink. Number appears green when note is held flat but changes to blue when viewed at angle.
- Back-to-back registration — Floral design printed on front and back of note coincides and perfectly overlap each other when viewed against light.
- EURion constellation
Convertibility
Officially, the Indian rupee has a market determined exchange rate. However, the RBI trades actively in the USD/INR currency market to impact effective exchange rates. Thus, the currency regime in place for the Indian rupee with respect to the US dollar is a de facto controlled exchange rate. This is sometimes called a dirty or managed float. Other rates such as the EUR/INR and INR/JPY have volatilities that are typical of floating exchange rates. It should be noted, however, that unlike China, successive administrations (through RBI, the central bank) have not followed a policy of pegging the INR to a specific foreign currency at a particular exchange rate. RBI intervention in currency markets is solely to deliver low volatility in the exchange rates, and not to take a view on the rate or direction of the Indian rupee in relation to other currencies.
Also affecting convertibility is a series of customs regulations restricting the import and export of rupees. Legally, foreign nationals are forbidden from importing or exporting rupees, while Indian nationals can import and export only up to 5000 rupees at a time, and the possession of 500 and 1000 rupee notes in Nepal is prohibited.
RBI also exercises a system of capital controls in addition to the intervention (through active trading) in the currency markets. On the current account, there are no currency conversion restrictions hindering buying or selling foreign exchange (though trade barriers do exist). On the capital account, foreign institutional investors have convertibility to bring money in and out of the country and buy securities (subject to certain quantitative restrictions). Local firms are able to take capital out of the country in order to expand globally. But local households are restricted in their ability to do global diversification. However, owing to an enormous expansion of the current account and the capital account, India is increasingly moving towards de facto full convertibility.
Chronology
- 1991 - India began to lift restrictions on its currency. A series of reforms remove restrictions on current account transactions including trade, interest payments & remittances and on some capital assets-based transactions.
- 1997 - A panel set up to explore capital account convertibility recommended India move towards full convertibility by 2000, but timetable abandoned in the wake of the 1997-98 East Asian financial crisis.
- 2006 - The Prime Minister, Dr Manmohan Singh, asks the Finance Minister and the Reserve Bank of India to prepare a road map for moving towards capital account convertibility.
Currency bill tracking
In 2007, a Currency bill tracking project (TrackGandhi) was started to track the spread and usage of Rupee banknotes.
New symbol
The Ministry of Finance of the Government of India announced on 5 March 2006 a contest to design a identifiable symbol for the rupee. The contest is open to "resident Indians" and the the Finance Ministry statement mentions that the "symbol should represent the historical and cultural ethos of India." The new symbol will replace the current Rs.
See also
External links
- Book by B. R. Ambedkar. History of the Rupee till 1923 A.D.
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