OnGreetings, Law student and Law Aspirant welcome to you at the law educational school that is “The Law IQ”. Today, The Law IQ came up with a new article in the field of Banking Law.
Today, In this article The Law IQ covers the Currency System in India. This article helps you to sharpen your legal mind in the field of Banking Law.
These articles cover the following things:
Historical Backgorund
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Decimal System
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Issue and Distribution of currency
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Coins
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Currency Denominations
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Demonetization of Currency
So, Let’s start the article without wasting time.
Historical Background
- As per the history, the First ever gold coins were introduced during the period of Guptas (AD 390-550).
- In the period of King Sher Shah Shuri Ruppes was minted in India, around AD 1542. And it is was silver coins.
- These silver coins replace gold coins.
- In AD 1873, These silver coins lost their metallic value just after fell in the world market. As per History, In world market exchange value of the Indian Rupees in world market was 10 Rupees for 1 Pound in 1873.
- In AD 1882, the British Government introduced paper currency in the Market.
- The Reserve Bank of India was established in 1995. After that India rupees became an Independence Currency of India.
- India became a member of the INTERNATIONAL MONETARY FUND in 1947. And exchange value is set by International Monetary Fund Standards.
Decimal System
- After becoming a member of the International Monetary Fund, India firstly change currency system.
- The first and major step done by bringing new law.
- On 1 April 1957 Indian Coinage (Amendment) Act comes into force.
- Indian Currency system converted into the Decimal System.
- This conversion is known as the Decimalization of Indian Coins.
- The old currency system of rupees, annas and paise was replaced by the rupee and paise system.
- In March 1962, the first one-paise coin was issued and the first one-rupee coin was issued in July 1962.
Issue and Distribution of Currency
As per the law, the Indian government issued all coins and one rupee notes in the market.
DO YOU KNOW?
This old One rupee note does not bear the signature of the Governor of the Reserve Bank of India.
→ because this one rupee note is issued by the Govement of India.
All about Coins
Only the government of India has the sole right to mint coins. The Legal Framework for coinage in India is under The Coinage Act, 1906. And this precious act amended from time to time.
All the coins are minted in following 4 Goverment Mint:
- Mumbai
- Kolkata
- Hyderabad
- Noida
RBI categorizes coins as
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1. Small Coins
2. Rupees Coins.
Small coins → denominations of 10 paise, 20 paise, 25 paise and 50 paise.
Rupees coins → denomination of 1 Rupee, 2 Rupees, 5 Rupees and 10 Rupees.
DO YOU KNOW?
- Coins can be issued up to the denominations of 1000 Rupees as per the Coinage Act, of 1906.
- From 30 June, 2011 all small coins up to 25 paise were demonetized.
Currency Denominations
At present in India, Currency notes of Denominations of 1 Rupee, 2 Rupees, 5 Rupees, 10 Rupees, 20 Rupees, 50 Rupees, 100 Rupees and 500 Rupees.
The current series is started in year 1996. And this series called as ‘Mahatma Gandhi Series‘.
All the notes which is above 1 Rupees denominations are issued by the Reserve Bank of India.
Therefore, Currency notes of India abover one rupeen denominations bear the signature of the Governor of the Reserve bank of Indiia,
These all notes called as the Bank notes.
Here, Reserve Bank of India work as agent of Goverment of India. Therefore, Distribution and administrations of the all currency notes and coins is done by the Reserve Bank of India.