INR - Indian Rupee

The Indian Rupee (currency code: INR) is the official currency and legal tender of the Republic of India. It can be divided into 100 smaller units called paisa, although the smallest denomination coin is that of 50 paise. The Reserve Bank of India reserves the exclusive right to issue the currency. The rupee symbol, based on the Devanagari letter “Ra” and the Latin letter R, was chosen after a design competition. Because of the language diversity in India, the amounts on rupee banknotes are written in 15 languages (there are 22 official languages in India), in addition to Hindi and English lettering. The Indian rupee is also accepted as legal tender in Nepal and Bhutan, which peg their currencies to the rupee. While India was under the British rule, the rupee was also used as the official currency and legal tender in areas controlled by the British, including East Africa, Southern Arabia and the Persian Gulf.

History of the Indian Rupee

India was one of the first countries to issue currency. The rupee dates all the way back to 6th century B.C. The origin of the word rupee is usually tied with the Dravidian word rūpa, which is loosely translated as silver, or coin of silver. Seeing as the rupee was a silver-based currency for most of the 19th century, its value was impacted significantly, because most of the developed countries used gold as the basis for their economies. After large deposits of silver were discovered in the U.S, as well as in some of the colonies, it led to its depreciation, which in turn led to the depreciation of the rupee, rendering it worthless in the international monetary transactions. This set of circumstances is known as the “fall of the rupee”.

During the third quarter of the 20th century, the rupee was tied to the pound sterling, following the same exchange rate. When the pound sterling was allowed to float, the rupee did the same. After the pound devaluated, so did the rupee. Finally, in 1975, the Indian rupee was un-pegged from the pound sterling, and adopted a controlled float exchange system, referenced by a basket of currencies, much like the People’s Republic of China.

International Use of the Indian Rupee

After Pakistan became independent, they re-branded the rupee coins and banknotes, simply by stamping “Pakistan” over them. In the past, the rupee was used in a multitude of locations and countries, such as Aden, Oman, Dubai, Kuwait, Bahrain, Qatar, the Trucial States, Kenya, Tanganyika, Uganda, the Seychelles and Mauritius. The rupee was also used in the Persian Gulf, where it was issued under control of the Indian government, under the moniker of Persian rupee. The Persian rupee was issued as the replacement for the Indian rupee, and India used it for circulation outside the country. Carried out under the Reserve Bank of India Amendment Act, it was done to reduce the impact of gold smuggling on India’s foreign reserved. Following the devaluation of the rupee in 1966, the Persian rupee was abandoned by the counties using it, with each of them creating their own currencies.

Indian Rupee Coins

The first series of decimalized coins was issued in 1957, with denominations of 1, 2, 5, 10, and 25 paise, as well as 1 rupee. They were struck in different materials: the 1-paisa coins was minted in bronze, the 2, 5 and 10-paisa coins were struck in cupronickel, while the rest of the paisa-denominated coins were nickel, the same as the 1-rupee coin. 2-rupee coins were issued in 1982, while the 5-rupee coin was introduced in 1992. The largest coin currently in circulation is the 10-rupee coin.

Indian Rupee Banknotes

The design of the notes has to undergo a selection process by the central government, where it considers the suggestions made by the board of the Reserve Bank of India. The notes are printed in several different places, including the Currency Note Press in Nashik, the Bank Note Press in Dewas, the Bharatiya Note Mudra Nigam presses at Salboni and Mysore, and at the Watermark Paper Manufacturing Mill in Hoshangabad.

The current series of banknotes, also referred to as the Mahatma Gandhi series, because it features a portrait of Gandhi on every note, was introduced into circulation in 1996, with notes featuring denominations of 5, 10, 20, 50, 100, 500 and 1000 rupee. There is also the zero rupee note, which is not legal tender, but rather a form of protest, issued by one of the non-government organization that are present in India. Much like other countries, India began introducing notes printed on polymer instead of paper, albeit on a trial basis. This was done not just for security purposes, in order to make the notes harder to counterfeit, but also because of the longer lifespan, which is nearly 4 times longer than the lifespan of the equivalent paper banknotes.

Because of the large number of languages that are in use in India, banknotes feature amounts written in 17 different languages. In addition to English and Hindi, amounts are written in Assamese, Bengali, Gujarati, Kannada, Kashmiri, Konkani, Malayalam, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Tamil, Telugu and Urdu.