5 Things to know about your currency

B S Akshat Kaushal  

January 25, 2014 Last Updated at 20:36 IST

Interesting facts about India's coins and banknotes

As the Reserve Bank of India (RBI) orders withdrawal of all banknotes issued before 2005, Business Standard lists five things you might want to know about the Indian currency:

When was the first note issued in India?
The process of issuing paper currency was started in the 18th century. Private banks such as – the Bank of Bengal, the Bank of Bombay, and the Bank of Madras – first printed paper money. It was only after the Paper Currency Act of 1861 that the government of India was given the monopoly to print currency.

The government of India printed currency until the RBI was established in 1935, which then took up this responsibility.

In 1938, India was printing banknotes of Rs 10,000 denominations!

The Rs 5-note was the first paper currency issued by RBI in January 1938. It had the portrait of George VI. Within the same year, currency notes of Rs 10; Rs 100; Rs 1,000; and Rs 10,000 were issued.

In 1946, Rs 1,000 and Rs 10,000 notes were demonetised to curb unaccounted money. These were then reintroduced in 1954 (this time Rs 5,000 note was also printed), only to be withdrawn in 1978 again.

Can the RBI publish notes of any denomination it wants?
At present, notes of Rs 10; Rs 100; Rs 500; and Rs 1,000 are only printed. The printing of Re 1, Rs 2 and Rs 5 has been stopped as these have been coinised.

However, the RBI has the powers to print currency notes of up to Rs 10,000 denomination. But, an amendment to the Reserve Bank of India Act, 1934 will be needed if any note of higher denomination has to be printed.

Who decides how many notes are to be printed?
How many notes are to be published is decided by the RBI. The RBI factors in inflation, GDP growth, replacement of soiled banknotes and reserve stock requirements, before deciding on how many notes are required.

What about the coins?
Minting of coins is the responsibility of the government of India, and not of the RBI. For this reason, the Re 1 note has the signature of the Finance Secretary to the government of India. This has been so because when the one rupee note was reintroduced as a war time measure in 1940, it was issued by the government of India with the status of a coin. Government of India continued to issue Rupee one notes till 1994.

A Rupee coin (Re 1 and above) can be used to pay/settle any amount sum, However, 50 paise coin cannot be used to pay/settle any amount above Rs 10.

Coins of up to Rs 1,000 denominations can be minted.
 
Source: RBI