2017-05-17 Wed

We handle Paper money on daily basis but have you ever thought about the historical impact of banknotes? How does it work or what is its significance? The innovation of banknote and coins is one and the same. But coins take the form of tangible assets (silver and gold coin). Later on, due to the introduction of paper money, coins stayed in vaults of the banks while paper money began to be circulated as promissory notes.

Many factors led to the introduction of paper money. Did you know that Paper money was first introduced in China? Read more about it here. Today we are going to talk about the paper currency of British India with reference to banknotes of King George V. The influence of paper currency started in the 18th century when the mercantile monopoly of East India Company (EIC) was challenged. This resulted in several joint stock banks.

After 1857 the rule of EIC ended and the Crown took over the Dominion of India. During that time a state-run Paper currency was proposed. An elaborate administrative system was set up to control the issues, circulation and destruction of these notes through the ‘Issue Offices’.

During the reign of King George V, a notion was proposed to change the traditional design for security reason but this idea was dropped due to World War I. Later on, notes of lower denominations were issued in 1917. One rupee note with the portrait of King George V was the first promissory note to be issued.

This above shown 50 Rupees note was released in 1930 and was printed at Nasik. This note belongs to Madras circle.

Some interesting facts :
• The first note whose payment was guaranteed by the government were introduced through the Indian paper money Act of 1861.
• The first Indian notes were issued by Bank of Hindostan.

Learn more about Indian banknote Ten Rupee and 100 Rupee.

To know about the British coinage click here.

PS: Image courtesy Classical Numismatic Gallery, this note is in Very Fine + condition and its circle is Very Rare. It was sold for INR 4,00,000.