Financial Instruments and 'Hundies' in India have a venerable history. Paper Money,
in the modern sense, traces its origins to the late eighteenth century with the
issues of private banks as well as semi-government banks (the Bank of Bengal, the
Bank of Bombay and the Bank of Madras alluded to as the Presidency Banks).
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Bank of Bengal
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Bank of Bombay
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Bank of Madras
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Among the earliest issues were those by the Bank of Hindostan (1770-1832), the General
Bank in Bengal and Bahar (1773-75, established by Warren Hastings), the Bengal Bank
(1784-91), amongst others. Few of these notes survive.
The Paper Currency Act of 1861 conferred upon Government of India the monopoly of
Note Issue bringing to an end note issues of Private and Presidency Banks. Paper
currency in India owed much to the intellectual stimulus and personal dynamism of
Sir James Wilson, the first Finance Member in the Executive Council of the Viceroy
of India. With the early death of Sir James, the task of issuing Government Paper
Money in India devolved upon his successor Samuel Laing who substantially modified
Wilson's original proposals.
Government of India continued to issue currency notes till the Reserve Bank of India
was established on 1st April, 1935. When the one rupee note was reintroduced as
a war time measure in August, 1940, it was issued by Government of India with the
status of a coin. Government of India continued to issue Rupee one notes till 1994.
The motifs appearing on Indian currency notes reflect the changing socio-cultural
ethos and the world-view of the times: buccaneering mercantilism, colonial consolidation,
domineering imperialism, the grandeur of empire, to the symbols of National Independence
followed up by allegories of progress and finally in the latest series, reminiscing
Gandhian values.