Currency in India: An Overview
First paper currency in India was issued during the late 18th century by British East India Company. Private Banks as the Bank of Hindustan and presidency banks were among the pioneers.
British Government of India introduced the Paper Currency Act of 1861, under which had a monopoly to issue paper notes in the country. Presidency Banks appointed as authorized agents to promote circulation of notes in the country. This resulted in Currency circles-places where paper notes were legal tender. All agreements are rendered void in 1867.
At this time, Mint Masters, Controller of Currency, Accountant General were given the responsibility of promoting, redemption of currency and circulations. This continued till the Reserve Bank of India, RBI, was founded in 1935.
According to the Section 22 of RBI Act of 1934 which has sole right to issue up bank notes of all denominations. This means that RBI is responsible for design, production and overall management of nation’s currency.RBI to ensure immediate supply of genuine and supply of clean notes. RBI consults with government and addresses issues connected with security to enhance to counter risks or forging.
RBI required to maintain a gold AND foreign Exchange Reserve of Rs 200 crore. This is at least Rs 115 crore to be in gold. This system is called the Minimum Reserve System.Issue Department and Currency Department is one assets and liabilities are kept separate from Banking Department. Department of Currency Management is located at Central office at Mumbai. there are 19 Issue offices. There are network of 4281 currency chests and 4044 small coin deposits.
Currency Chests are storehouses where rupee coins and bank notes are stocked. These Chests have established with State Bank of India, six associate banks, nationalized banks, private sector banks, a foreign bank, a state cooperative bank and a regional rural bank.
Security Printing and Minting Corporation of India Limited, SPMCIL prints currency notes. Printing presses are located at Nasik in Maharashtra and Dewas at Madhya Pradesh. Bharatiya Reserve Bank Note Mudran Pvt. Ltd, BRBNMPL, also has set up printing presses. These presses are at Mysore in Karnataka and Salboni in West Bengal.
SPMCIL has mints for coin production-Mumbai, Noida, Kolkata and Hyderabad. The value of a bank note is written on it in 17 of the 22 official languages of India. Languages are Assamese, Bengali, Gujarati, Kannada, Kashmiri, Konkani, Malayalam, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Tamil, Telugu and Urdu.