Rupee: Indian Currency Importance, History and Explored

The Indian Rupee is the official currency of India. The symbol of rupees is “₹”. The name "rupee" is a derivation of the Sanskrit word rupya which means "image". In ancient times it was called so because it was denominated in terms of weight and one rupya weighed 113 grams as against 62 grams for an average silver coin of that period.

Before the demonetization of ₹500 and ₹1000 notes, the country’s economy used to be cash-based, resulting in the circulation of counterfeit currencies by those involved in criminal activity. Over the years, RBI was compelled to change and upgrade INR notes with new security features. Generally, large denominations are the most forged bills. In this blog ahead we will read more about the Indian currency, its value and examples.

Did you know that India was one of the largest economies with an annual GDP of $1.5 trillion and a population of 1.3 billion? Unfortunately, India’s economy has been subjected to counterfeiting due to the cash-based economy in the country. This is because there are many people involved in criminal activity who use fake currency to exchange goods and services.

What is the Indian Rupee?

The official currency of India is the "Rupee"(₹). The symbol of Indian currency is '₹' and the code is 'INR' which stands for "Indian Rupee". The sub-units of 100 paise are equal to the Rupee. It is printed and issued by the Reserve Bank of India. 

The currency in India is circulated in two forms i.e., 1. Currency Notes 2. Coins. 

The frequently used currency notes are ₹10, ₹20, ₹50, ₹100, ₹200, ₹500, and rarely used notes are ₹1, ₹2, ₹5, ₹2000.

In coins, the frequently used ones are ₹1, ₹2, ₹5, ₹10, and the rarely used coin is the 50 paise [currently not in use]

Other than India, the currency name Rupee is commonly used in other countries such as Pakistan, Srilanka, Nepal, Seychelles, Mauritius, Indonesia (Rupiah), and Maldives (Rufiyaa).

Did you know? The Reserve Bank of India (RBI) has no right to mint coins where they were printed by the Government of India (GOI) but the RBI has taken up the responsibility of circulating the coins issued by the GOI.

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Origin of Indian Currency

Before the origin of currency, the system in existence for the exchange of goods and services was the Barter system. During evolution, this system was replaced by various forms of currency. The first form of currency brought by the ancient humans was cowrie shells and its first use dates to 1200 BC. In later stages, other forms of currency were introduced such as Coins and Notes.

Coming to India, the word rupee is derived from the Sanskrit word “Rupya" which means silver coin or some shaped coin. The history of the rupee can be explored back to the 6th century BC. Ancient Indians along with the Chinese and Lydians from the Middle East were the early issuers of a coin.

Who Minted the First Indian Coin?

The first coins in India were minted by the Mahajanapadas around the 6th century BC. During this period coins were punched, called Puranas, Karshapanas, or pana. These coins have an irregular shape and are made up of silver with a standard weight.

In a later stage, the Mauryan kingdom brought punch-marked coins in silver, gold, copper, and lead. Chanakya, who was appointed as a prime minister to the first Mauryan emperor Chandra Gupta Maurya, referred to silver coins as rupyarupa, gold coins as suvarnarupa, copper coins as tamararupa and lead coins as sisarupa. Here Rupya means the shape of metal.

History of Sher Shah Suri with Rupiya

During the period 1540 to 1545, a silver coin named rupiya weighed 178 grams issued by Sultan Sher Shah Suri. Since then, this silver coin was used during the Mughal period, Maratha Era, and also in British India.

Even in the initial days of British India, Rupiya issued by Sher Shah Suri was still popular.

The paper currency in India was first issued by the Bank of Hindostan General Bank in Bengal and Bengal Bank during the 18th century.

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British Government and Indian Rupees 

After the 1857 Indian Rebellion, the British declared the rupee as an official currency of colonial India and inserted the head image of King George VI replacing the Indian native designs.

The Reserve Bank of India (RBI) was established on April 1st, 1935. The first paper currency note was a five rupee (₹5) issued by the RBI with an image of King George VI in January 1938.

Indian Rupee after Independence

After attaining independence in 1947, the modern Indian rupee replaced the George VI series with the Lion capital series. One rupee (₹) was the first note issued by the RBI after independence.

Later in the year 1996, all notes of the Lion capital series get replaced by the Mahatma Gandhi series starting with ₹10 and ₹500 notes.

As time changes, everything is changing at a faster pace. The new Indian currency come up with many security features to curb the practices of fake currency circulation. Some of the security features of banknotes are as follows:

• Watermark (Mahatma Gandhi’s)
• Identification Marks (Different shapes of denomination)
• Security Thread (Inscriptions of Bharat in Hindi)
• Latent image (denominational value visible only when note held horizontally at eye level)

Importance of Indian Currency

Since many problems exist in the Barter system. Currency eliminates all those limitations of the barter system by facilitating the following benefits:

• The convenience of Trading – Since the value of the commodity is measurable with the help of currency.
• Easily Carried – Currency in the form of small coins and notes can be easily carried anywhere.
• Long-Lasting Storage of Value of Money – In a barter system, perishable goods cannot be stored for a long time for exchange.

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Value of Indian Currency

The value of the Indian rupee at the time of independence against the US Dollar ($) was only ₹3.3. Now we have celebrated 75 years of independence where the value of the rupee against the US Dollar ($) is ₹82.55. Since post-independence, the value of the rupee was consistently devaluing. There are many reasons behind devaluation but one main reason is imports to India are more major than exports from India so the country faces an adverse Balance of Payments.

Value of the Indian rupee against some popular currencies in the world (As of 04/11/2022)

Interesting Facts of Indian Rupee

• Vietnam is the country where the Indian rupee has the highest value.
• Kuwait Dinar is the country where the Indian rupee has the very lowest value.
• The government of India can mint coins with denominations up to the value of ₹1,000.
• The higher denomination note that can be allowed by the RBI is of ₹1,000
• The raw material used for the making of currency notes is “100% cotton”.
•  RBI had printed denominations of ₹5,000 and ₹10,000 notes in the year 1938, later demonetized the same in the year 1946. Again, re-introduced the notes in 1954 and again demonetized in 1978.   

Countries Where Indian Rupees Has a Stronger Value

Everyone has their dream destiny to visit and wishes to have great memories in life but what makes us feel discouraged is the heavy cost involved in travelling to other countries. Many people think the Indian currency is weaker just by comparing it with the US Dollar, UK, Canada, and such other famous countries. But what if we tell you that there are few countries where the Indian currency is stronger and makes you feel burden free and increase your purchasing power? The list of countries is as follows:

1. Vietnam
2. Indonesia
3. Uzbekistan
4. Laos
5. Paraguay
6. Cambodia
7. Mongolia
8. South Korea

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Examples of Indian Currency

Coins

In India, coins are being issued in denominations of 50 paise, ₹1, ₹2, ₹5, ₹10, and ₹20.  The maximum value of a coin that can be minted is up to ₹1000 as per The Coinage Act, 2011.

Bank Notes

In India, currently, Bank Notes are being issued in denominations of ₹10, ₹20, ₹50, ₹100, ₹200, ₹500, and ₹2000. The notes of ₹2 and ₹5 are discontinued. In 2016, the Government of India demonetized the notes in denominations of ₹500 and ₹1000 and issued new currency notes of ₹500 and ₹2000. 

Conclusion

As you have read the article covers the information on Indian currency and its origin and other interesting facts about the rupee and its value compared to other countries. Despite the Indian rupee's devaluation compared with some foreign currencies, it holds good value and glory at the times of ancient India.  

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