The Indian rupee

Why coins and notes come from two authorities

The Reserve Bank of India takes its right to issue banknotes from the Reserve Bank of India Act of 1934. It began producing notes in 1938. Under Section 26 of that Act the Bank is liable to pay the value of every note it issues. The central government approves each note design on the recommendation of the Bank's central board.

Coins are a different matter. The Government of India alone may mint them, and it also keeps the right to issue the one-rupee note. The Coinage Act of 1906, amended from time to time, governs the work, and the India Government Mints at Mumbai, Kolkata, Hyderabad and Noida strike the coins. They still reach the public only through the Reserve Bank. Notes come off the presses at Nashik, Dewas, Salboni and Mysore, on paper from a watermark mill at Narmadapuram.

What independent India put on its money

India became independent at midnight on 14 August 1947, but the Republic dates from 26 January 1950, and in between the Reserve Bank kept issuing the notes already in use. The Government brought out a new one-rupee note in 1949. Designers first drew notes with a portrait of Mahatma Gandhi in place of the King's. The choice settled instead on the Lion Capital at Sarnath, and the first Republic notes of 2, 5, 10 and 100 rupees followed in 1950.

Hindi moved to a prominent place on the notes in 1953. That year a debate over the Hindi plural of the word ended in favour of rupiye. Notes from before independence stopped being legal tender on 28 April 1957. In 1996 the Reserve Bank opened the Mahatma Gandhi Series with 10 and 500 rupee notes; that series went on to replace every Lion Capital note.

How the anna gave way to the paisa

The old rupee split into annas and the anna into smaller pieces down to the pie, a twelfth of an anna. On decimalisation in 1957 the rupee was divided into 100 naye paise, Hindi for new paise, and the word naye came off the coins in 1964. The old names survive in speech: a 25 paise coin is still called four annas. The 25 paise coin and every smaller one were demonetised in 2011.

When notes were withdrawn overnight

Notes above 100 rupees were demonetised in 1978. On 8 November 2016 the Government declared the 500 and 1,000 rupee notes of the Gandhi series invalid from midnight that same day. A redesigned 500 and a new 2,000 rupee note went into circulation on 10 November, and the rest of the Mahatma Gandhi New Series, from 10 to 200 rupees, came out between 2017 and 2019. The 2,000 rupee note has since been recalled, though it remained legal tender as of 27 April 2025.

Where the rupee circulated beyond India

The rupee once served as official money in Aden, Oman, Kuwait, Bahrain, Qatar, the Trucial States, Kenya, Uganda, the Seychelles and Mauritius. An amendment to the Reserve Bank of India Act, dated 1 May 1959, created a separate Gulf rupee for circulation outside the country, to ease the strain that gold smuggling put on India's reserves. Kuwait and Bahrain dropped it for their own dinars in 1961 and 1965; the remaining Gulf users followed after India devalued on 6 June 1966.

Inside the subcontinent the rupee absorbed the French Indian rupee in 1954 and the Portuguese Indian escudo in 1961. Bhutan's ngultrum is pegged to it at par. Both circulate in Bhutan, and the ISO 4217 list names both as its currencies. The 200 and 500 rupee notes of the new series are not legal tender there or in Nepal.