History of paper currency in Indian subcontinent

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Prehistoric Madrasian culture Soanian, c. 500,000 BCE Neolithic, c. 7600 – c. 1000 BCE Bhirrana 7570 – 6200 BCE Jhusi 7106 BCE Lahuradewa 7000 BCE Mehrgarh 7000 – 2600 BCE South Indian Neolithic 3000 – 1000 BCE
Ancient Indus Valley Civilization, c. 3300 – c. 1700 BCE Post Indus Valley Period (Cemetery H Culture), c. 1700 – c. 1500 BCE Vedic civilization, c. 1500 – c. 500 BCE Kuru kingdom, c. 1200 – c. 500 BCE Early Vedic period Rise of Śramaṇa movement Later Vedic Period Spread of Jainism – Parshvanatha Spread of Jainism – Mahavira Rise of Buddhism Kingdom of Magadha Brihadratha Dynasty 1700 – 682 BCE Haryanka Dynasty 544 – 413 BCE Shaishunaga Dynasty 413 – 345 BCE Nanda Dynasty, 345 – 322 BCE Mahajanapadas, c. 600 – 345 BCE
Classical Kingdom of Magadha Maurya Dynasty, 322 – 185 BCE Pandya Dynasty, 320 BCE - 280 CE Shunga Dynasty, 185 – 73 BCE Kanva Dynasty, 73 – 28 BCE Sangam period 300 BCE – 400 CE Kushan Dynasty, c. 30 – c. 375 CE Satavahana Dynasty, c. 228 BCE – c. 224 CE Gupta Dynasty, c. 240 – c. 550 CE
Early medieval Pallava dynasty, 275 CE - 897 CE Chalukya Dynasty, 543 – 753 CE Pandya Dynasty, 590 CE - 920 CE Harsha's Dynasty, c. 606 CE – c. 647 CE Karakota Dynasty, c. 724 – c. 760 CE Arab Invasion, c. 738 CE Tripartite Struggle, c. 760 – c. 973 CE Pratihara dynasty Rastrakuta Dynasty Pala Dynasty Chola Dynasty, c. 848 – c. 1251 CE 2nd Chalukya Dynasty, c. 973 – c. 1187 CE
Late medieval Delhi Sultanate, 1206 – 1526 CE Mamluk Dynasty Khalji Dynasty Tugluq Dynasty Sayyid Dynasty Lodhi Dynasty Pandyan Empire, 1251 – 1618 CE Vijayanagara, 1336 – 1646 CE Bengal Sultanate, 1342 – 1576 CE
Early modern Mughal Dynasty, 1526 – 1540 CE Suri Dynasty, 1538/40 – 1556 CE Mughal Dynasty, 1556 – 1857 CE Bengal Subah, c. 1576 – c. 1757 CE Maratha Empire, c. 1674 – c. 1818 CE Company Raj, c. 1757 – c. 1858 CE Kingdom of Mysore, c. 1760 – c. 1799 CE Sikh Empire, c. 1799 – c. 1849 CE
Modern The Great Rebellion, 1857 – 1858 CE British Raj, 1858 – 1947 CE Independence Movement Independent India, 1947 CE – present Dominion of India, 1947 – 1950 CE Republic of India, 1950 CE – present
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Many European trading companies came to India's during the 18th century. These trading companies set up private banks which issued paper currencies in Indian subcontinent first. But these notes were text-based.^[1] Charles Canning, 1st Earl Canning first introduced paper currency in Indian subcontinent in 1861 officially.

India has a rich tradition of financial instruments and hundi. In the modern sense, paper currency was introduced in India in the last half of the eighteenth century when private and semi-public banks began to introduce currency. The Paper Currency Act, 1861 gave the Government of India the exclusive right to print and circulate banknotes and thereby abolishes the printing and circulation of banknotes by the private Presidency Banks. Until the establishment of the Reserve Bank of India on 1 April 1935, the Government of India continued to print and issue banknotes.^[2][3]

The expansionist strategies of the East India Company led Bengal to a scarcity of gold and silver bullion. Sensing an emerging credit crisis, the British official introduced paper currency in India.^[4]

Warren Hastings established the Bank of Hindostan (1770–1832) which was considered the general bank in Bengal and Bihar (1773–75) and the Bank of Bengal (1784–91) issued the bank notes initially. The government formed by the East India Company didn't recognize these paper currencies officially. These were restricted promissory currencies and only legal for private uses. Because of financial mishandling, the three banks were shut down and these notes were non-starters even in 1832. After the enactment of the paper currency act in 1861, a series of banknotes and coins were issued in the honor of Queen Victoria in 1862 with her portrait on them.^[5]

As the business of counterfeit notes increased, this new chain was introduced in 1867 and was divided into 5, 10, 20, 50, 100, 500, 1,000 and 10,000 rupees notes. In 1923, another series with the portrait of George V was introduced. It was divided into 1, 26, 5, 10, 50, 100, 1,000 and 10,000 rupees notes.^[6][7]

In January 1936, the Reserve Bank of India first issued five rupee notes containing the portrait of King George VI. Then in 10 February rupee notes, in March 100 rupee notes and in June 1938 1000 and 10000 rupee notes were released. Notes with a portrait of King George VI were issued in 1948 and later until 1950, after which notes with a picture of the Ashoka Pillar were issued.^[8]

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