Paper currency is used worldwide today, but how many of us know about the history of notes of India; their origin and evolution. Indian notes began as notes issued by banks and were known as Banknotes. Issuing currency notes of India was later taken over by the British Government of India who circulated them throughout the country. This unified the design of paper currency all over the country. After the Reserve Bank of India was set up, the authority to issue currency notes in India was transferred to them. The RBI is the only establishment in the country with the power to issue paper currency for circulation.
A bank note is a negotiable instrument or a promissory note issued by a bank. It is also known as Early Bank Notes. Banks in India were free to issue promissory notes that were payable to the bearer on demand. Notes of India issued from late 18th century onwards were payable to the bearer on demand which meant that the Indian note could be encashed by person presenting it for coins of the value stated upon these old notes of India.
After the Paper Currency Act was enacted in 1861 CE, currency notes in India began to be officially issued by the Government of India. The first set of Indian notes to be issued by the British Government of India featured Queen Victoria`s portrait and were issued in denominations of Rupees 10, 20, 50, 100 and 1000. The Uniface Underprint series of Indian notes were first issued in 1867 CE. Small denomination Indian notes were introduced due to public demand and the regular issues of the King`s Portrait Series were introduced in May 1923 with the ten rupee denomination. The note carried George V`s portrait which would be an integral feature of all subsequent British Indian Government issues.
After the RBI was formally inaugurated on April 1, 1935, currency notes of India were issued only by them. Colonial issues of the RBI include notes that depict the portrait of King George VI. Currency notes of India bearing the portrait of King Edward VIII were issued but never released into circulation due the emperor`s abdication. Republic issues of Indian notes by the RBI bear vignettes that are a symbol of the country, its history, and its development.