THE HISTORY OF INDIA'S PAPER MONEY

1864 Government of India 20 Rupees note

Indian paper money is 160 years old this month. See how an act meant to tighten British control ended up uniting us in spirit, then and even today.

Open your wallet and sing Happy Birthday. Indian paper money is 160 years old this month. Our distinctive series of notes — which today bear the name of the Reserve Bank of India, feature a portrait of Mahatma Gandhi, and effortlessly represent rupees within India and abroad — didn't exist before 1861.

Of course, we had money long before that. India is one of the first regions in the world to have used coins. Metal bits of various values, issued by local empires, kingdoms, princely states and colonial presidencies, have been circulating for more than 2,600 years. But notes — paper scraps that somehow have the power to make you rich or poor — are relatively recent. They were born with the Paper Currency Act of 1861, which gave the British colonial government the sole right to issue uniform currency notes for its territories in India (which included parts of present-day Pakistan, Bangladesh and Burma).

In a country where paper currency was a very small part of the monetary system, the notes represented not just a new way of doing business. They were a leap of faith.

The British Empire had attempted to impose a currency monopoly a century earlier, in another dominion, with disastrous consequences. In the 13 colonies of British America, where a trade deficit had already put American businesses at a disadvantage, a currency act in 1764 rendered money from local banks useless.

Bank of Hindustan 10 Rupees note

The colonies protested vehemently. "It was seen by some as one of the many triggers that sparked the American Revolution," says Bazil Shaikh, former principal chief general manager and secretary of the Reserve Bank of India, and author of the 2020 book The Conjuror's Trick, about the evolution of Indian paper money.

In India a century later, another revolution, the Uprising of 1857-58, had shaken the British. They were heavily in debt from quelling the uprising. "When the Crown took control of India from the East India Company, the question arose, ‘Who repays the debts?' It was made clear that India would pay for its own suppression," says Shaikh. "The profit from the introduction of a government paper currency was seen as one of the means of setting right India's finances."

The way he tells it, the Bengaluru tycoon was born into money, and learnt early that it was valuable in more ways than one. As a schoolkid more than 50 years ago, he'd watch his parents and grandparents place the day's collections in the family safe at night.

"I decided to explore that safe one day," he recalls. "What I found were a handful of notes that said Reserve Bank of India but also bore the overprint "Pakistan". I showed them to my grandfather who immediately started cursing."

It turned out that the notes were interim currency issued for use in Pakistan just after Partition, before the State Bank of Pakistan was established. They were probably passed on by someone who had crossed the border with the money, but they had no value in India.

"I asked my grandfather if I could have them. He happily gave them to me, plus some other old notes," he says. "Then, on a summer holiday at my uncle's home in Coonoor, I found more old notes in my uncle's desk and was allowed to keep them. And so my journey began."

To read the complete article, see:
Cash of the titans: How India's paper money came to be (https://www.hindustantimes.com/lifestyle/art-culture/cash-of-the-titans-how-india-s-paper-money-came-to-be-101616764415186.html)

To read the earlier E-Sylum articles, see:
MUSEUM OF INDIAN PAPER MONEY (https://www.coinbooks.org/v23/esylum_v23n09a22.html)
THE MUSEUM OF INDIAN PAPER MONEY (https://www.coinbooks.org/v23/esylum_v23n21a31.html)

	NBS (coinbooks.org) Web