From barter to rupee: history of Indian currency

Abstract

The history of Indian currency is described in the paper by the following definitions of currency: it was developed and disseminated by a set of merchants that were part of the Great Migration in the 18th century for over one thousand years. Starting with the barter system created with crude currency between some primitive people of ancient India was one of the earliest systems of coinage. Various monarchs, including the Mauryas, Guptas, Delhi Sultanate, Mughals as well as British colonial rule introduced different coinage and trade forms and ways of running a land and society, which were eventually imported into the West. The advent of rupee in the sixteenth century was one of the major development of the rupee which standardised Indian currency. Paper currency and centralized monetary administration emerged during colonial rule, ending in 1935 when the Reserve Bank of India was formed (the first Indian bank). India had also adopted decimalization, national banking reforms, and a series of advanced security features for banknotes and currency in order to modernize this currency system post-independence. In the last years, digital payments and a Digital Rupee changed currency in India. The present paper follows the evolution of Indian currency (from barter to the modern rupee) and the socio-economic drivers driving the genesis of the currency. It also underscores the influence of currency in trade, governance, growth and national character. The study makes the point that history of Indian currency is not just a financial story, but also a record of India’s civilization and modernization.