India Paper Money A Retrospect
: 1770-1998
Financial Instruments and 'Hundies' in India have a venerable history. 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 Bank of Bengal, the Bank of Bombay and the Bank of Madras alluded to as the Presidency Banks).
Financial Instruments and 'Hundies' in India have a venerable history. 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 Bank of Bengal, the Bank of Bombay and the Bank of Madras alluded to as the Presidency Banks).
The Bank of Bengal
The Bank of Bombay
The Bank of Madras
Among the earliest issues were
those by the Bank of Hindostan (1770-1832), the General Bank
in Bengal and Bahar (1773-75, established by Warren Hastings),
the Bengal Bank (1784-91), amongst others. Few of these notes
survive.
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.
Paper currency in India owed much to the intellectual stimulus
and personal dynamism of Sir James Wilson, the first Finance
Member in the Executive Council of the Viceroy of India. With
the early death of Sir James, the task of issuing Government
Paper Money in India devolved upon his successor Samuel Laing
who substantially modified Wilson's original proposals.
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. Government
of India continued to issue Rupee one notes till 1994.
The motifs appearing on Indian
currency notes reflect the changing socio-cultural ethos and
the world-view of the times: buccaneering mercantilism, colonial
consolidation, domineering imperialism, the grandeur of empire,
to the symbols of National Independence followed up by allegories
of progress and finally in the latest series, reminiscing
Gandhian values.
Early Issues
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. Though successful
and profitable, the bank was officially wound up and was short
lived. The Bank of Hindostan (1770-1832) was set up by the
agency house of Alexander and Company was particularly successful.
It survived three panic runs on it. The Bank of Hindostan
finally went under when its parent firm M/s Alexander and
Co. failed in the commercial crisis of 1832. Official patronage
and the acceptance of notes in the payment of revenue was
a very important factor in determining the circulation of
bank notes. Wide use of bank notes, however, came with the
note issues of the semi-government Presidency Banks, notably
the Bank of Bengal which was established in 1806 as the Bank
of Calcutta with a capital of 50 lakh sicca rupees. These
banks were established by Government Charters and had an intimate
relationship with the Government. The charter granted to these
banks accorded them the privilege of issuing notes for circulation
within their circles.
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.
Unifaced Notes of the Bank
of Bengal
The Bank of Bengal notes later
introduced a vignette represented an allegorical female figure
personifying 'Commerce' sitting by the quay. The notes were
printed on both sides. On the obverse the name of the bank
and the denominations were printed in three scripts, viz.,
Urdu, Bengali and Nagri. On the reverse of such notes was
printed a cartouche with ornamentation carrying the name of
the Bank. Around the mid nineteenth century, the motif 'Commerce'
was replaced by 'Britannia'. The note had intricate patterns
and multiple colours to deter forgeries.
Commerce Series
Obverse and Reverse
Brittania Series
Obverse and Reverse
