History of The Rupee

The history of the rupee traces back to 15th century, when the first "rupee" is believed to have been introduced by Sher Shah Suri (1486–1545), based on a ratio of 40 copper pieces (paisa) per rupee. Ancient India in circa 6th century BC, was one of the earliest issuers of coins in the world, along with the Chinese wen and Lydian staters. The origin of the word "rupee" is found in the Sanskrit rūpya "shaped; stamped, impressed; coin" and also from the Sanskrit word "rupa" meaning silver.

The original rūpaya was a silver coin weighing 175 grains troy (about 11.34 grams). The silver coin remained in use during the Mughal period as well as in British India. Among the earliest issues of paper rupees include; the Bank of Hindustan (1770–1832), the General Bank of Bengal and Bihar (1773–75, established by Warren Hastings), and the Bengal Bank (1784–91).

The Indian rupee was a silver based currency during much of the 19th century; which had severe consequences on the standard value of the currency, as stronger economies at that time were on the gold standard. During British rule, and the first decade of independence, the rupee was subdivided into 16 annas. Each anna was subdivided into either 6 pices, or 12 pies. In 1957, decimalisation occurred and the rupee was divided into 100 Naye Paise (Hindi for new paisas). After a few years, the initial "Naye" was dropped.

For many years in the early and mid-20th century, the Indian rupee was the official currency in several areas that were controlled by the British and governed from India; areas such as East Africa, Southern Arabia and the Persian Gulf.