History of the rupee

Indian Rupee

  

  

Ancient India, presently modern states of Pakistan and north-western India, was one of the earliest issuers of coins in the world (circa 6th century BC),^[1] along with the Chinese wen and Lydian staters. The origin of the word "rupee" is found in theSanskrit rūpya "shaped; stamped, impressed; coin".

The derivative word rūpaya^{[citation needed]} was used to denote the coin introduced by Sher Shah Suri during his reign of 1540 to 1545. The original rūpaya was a silver coin weighing 175grains troy (about 11.34 grams).^[2] The silver coin remained in use during the Mughal period as well as in British India.

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 byWarren Hastings), the Bengal Bank (1784–91), amongst others.

Formerly the rupee was divided into 16 annas, 64 paise, or 192 pies. In Arabia and East Africa the British India rupee was current at various times, including the paisa and was used as far south asNatal. In Mozambique the British India rupees were overstamped, and in Kenya the British East Africa company minted the rupee and its fractions as well as pice. It was maintained as the florin, using the same standard, until 1920. In Somalia the Italian colonial authority minted 'Rupia' to exactly the same standard, and called the paisa 'besa'. Early 19th century E.I.C. rupees were used in Australia for a limited period. Decimalisation occurred in Ceylon (Sri Lanka) in 1872, India in 1957 and in Pakistan in 1961.

Historically, the rupee was a silver based currency. This had severe consequences in the 19th 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."

During British rule, and the first decade of independence, the rupee was subdivided into 16 annas. Each anna was subdivided into either 4 pices, or 12 pies.

In 1957, decimalisation occurred and the rupee was now divided into 100 Naye Paise (Hindi for new paisas). After a few years, the initial "Naye" was dropped. However many still refer to 25, 50 and 75 paise as 4, 8 and 12 annas respectively, not unlike the now largely defunct usage of "bit" in American English for 1/8 dollar. However the usage is in decline.