The Indian rupee (symbol: ₹; code: INR) is the official currency of India. The rupee is subdivided into 100 paise (singular: paisa), though as of 2019, coins of denomination of 1 rupee is the lowest value in use. The issuance of the currency is controlled by the Reserve Bank of India. The Reserve Bank manages currency in India and derives its role in currency management on the basis of the Reserve Bank of India Act, 1934.
In 2010, a new rupee sign (₹) was officially adopted. It was derived from the combination of the Devanagari consonant “र” (ra) and the Latin capital letter “R” without its vertical bar (similar to the R rotunda). The parallel lines at the top (with white space between them) are said to make an allusion to the tricolor Indian flag, and also depict an equality sign that symbolizes the nation’s desire to reduce economic disparity. The first series of coins with the new rupee sign started in circulation on 8 July 2011. Before this, India used “₨” and “Re” as the symbols for multiple rupees and one rupee, respectively.
On 8 November 2016, the Government of India announced the demonetization of ₹500 and ₹1,000 banknotes with effect from midnight of the same day, making these notes invalid. A newly redesigned series of ₹500 banknotes, in addition to a new denomination of ₹2,000 banknotes is in circulation since 10 November 2016.
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.
Arthashastra, written by Chanakya, prime minister to the first Maurya emperor Chandragupta Maurya (c. 340–290 BCE), mentions silver coins as rūpyarūpa, other types including gold coins (suvarṇarūpa), copper coins (tamrarūpa) and lead coins (sīsarūpa) are mentioned. Rūpa means ‘form’ or ‘shape’; for example, in the word rūpyarūpa: rūpya ‘wrought silver’ and rūpa ‘form’.
During his five-year rule from 1540 to 1545, Sultan Sher Shah Suri issued a coin of silver, weighing 178 grains (or 11.53 grams), which was also termed the rupiya. During Babur‘s time, the brass to silver exchange ratio was roughly 50:2. The silver coin remained in use during the Mughal period, Maratha era as well as in British India. Among the earliest issues of paper, rupees include; 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).
INDIA COUNCIL BILL
In 1870, India was connected to Britain by a submarine telegraph cable. Telegraphy Around 1875, Britain started paying India for exported goods in India Council (paper) Bills (instead of silver). If therefore, the India Council in London should not step in to sell bills on India, the merchants and bankers would have to send silver to make good the (trade) balances. Thus a channel for the outflow of silver was stopped, in 1875, by the India Council in London.
The great importance of these (Council) Bills, however, is the effect they have on the Market Price of Silver: and they have in fact been one of the most potent factors in recent years in causing the diminution in the Value of Silver as compared to Gold. The Indian and Chinese products for which silver is paid were and are, since 1873–74, very low in price, and it therefore takes less silver to purchase a larger quantity of Eastern commodities. Now, on taking the several agents into united consideration, it will certainly not seem very mysterious why silver should not only have fallen in price[
WORLDWIDE RUPEE USAGE
As the Straits Settlements were originally an outpost of the British East India Company, In 1837, the Indian rupee was made the sole official currency in the Straits Settlements, as it was administered as part of British India. This attempt was resisted by the locals. However, Spanish dollars continued to circulate and 1845 saw the introduction of coinage for the Straits Settlements using a system of 100 cents = 1 dollar, with the dollar equal to the Spanish dollar or Mexican peso. In 1867, the administration of the Straits Settlements was separated from India, the Straits dollar was made the standard currency, and attempts to reintroduce the rupee were finally abandoned.
After the Partition of India, the Pakistani rupee came into existence, initially using Indian coins and Indian currency notes simply overstamped with “Pakistan”. Previously the Indian rupee was an official currency of other countries, including Aden, Oman, Dubai, Kuwait, Bahrain, Qatar, the Trucial States, Kenya, Tanganyika, Uganda, Seychelles, and Mauritius.
The Indian government introduced the Gulf rupee – also known as the Persian Gulf rupee (XPGR) – as a replacement for the Indian rupee for circulation outside the country with the Reserve Bank of India (Amendment) Act of 1 May 1959. The creation of a separate currency was an attempt to reduce the strain on India’s foreign reserves from gold smuggling. After India devalued the rupee on 6 June 1966, those countries still using it – Oman, Qatar, and the Trucial States (which became the United Arab Emirates in 1971) – replaced the Gulf rupee with their own currencies. Kuwait and Bahrain had already done so in 1961 with Kuwaiti dinar and in 1965 with Bahraini dinar, respectively.
The Bhutanese ngultrum is pegged at par with the Indian rupee; both currencies are accepted in Bhutan. The Nepalese rupee is pegged at ₹0.625; the Indian rupee is accepted in Bhutan and Nepal, except ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series and the ₹200, ₹500 and ₹2,000 banknotes of the Mahatma Gandhi New Series, which are not legal tender in Bhutan and Nepal and are banned by their respective governments, though accepted by many retailers. On 29 January 2014, Zimbabwe added the Indian rupee as a legal tender to be used.