Banknote History

History of Indian Rupee Notes: Presidency Banks, the RBI of 1935, and the 2016 Demonetisation

India's paper money runs for more than 250 years, from agency-house banks in Calcutta issuing their own notes in the 1770s to the Mahatma Gandhi (New) Series that arrived overnight in November 2016. Along the way the rupee note passed from private banks to Presidency Banks to the Government of India, and finally to the Reserve Bank, which printed its first note only after a king abdicated.

Bank of Hindostan, 1770 Paper Currency Act 1861 RBI opened 1 April 1935 First RBI note, January 1938

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Last updated: September 2026

Who issued the first paper money in India?

Paper money in the modern sense arrived in India in the late eighteenth century through private and semi-government banks. The Reserve Bank names the earliest issuers as the Bank of Hindostan, active from 1770 to 1832, the General Bank in Bengal and Bahar of 1773 to 1775, and the Bengal Bank of 1784 to 1791. Few of those notes survive.

Nobody invented paper money in India in a single stroke. Financial instruments and hundies, the indigenous bills of exchange, already had a long history on the subcontinent (Reserve Bank of India Monetary Museum, India Paper Money). What changed in the 1770s was the political ground beneath the money: the Mughal Empire was collapsing, colonial powers were moving in, and large-scale finance shifted from indigenous bankers to agency houses that enjoyed state patronage. Many of those agency houses opened banks, and those banks issued notes.

The General Bank in Bengal and Bahar was state sponsored, set up with local expertise under Warren Hastings, and its notes enjoyed government patronage. It was profitable and short lived. The Bank of Hindostan, set up by the agency house of Alexander and Company, was the more successful of the two and survived three panic runs before going under when its parent firm failed in the commercial crisis of 1832 (RBI Monetary Museum, Early Issues). The Reserve Bank is blunt about the decisive factor in whether a note circulated: official patronage, and acceptance of the note in payment of revenue.

What were the Presidency Bank notes?

The Presidency Banks were the Bank of Bengal, the Bank of Bombay and the Bank of Madras, semi-government institutions established by government charters. Those charters gave them the privilege of issuing notes for circulation within their own circles, and their issues are where paper money first came into wide use in India.

The Bank of Bengal came first, established in 1806 as the Bank of Calcutta with a capital of 50 lakh sicca rupees. Its notes fall into three series that collectors still use as the sorting frame. The Unifaced Series was printed on one side only, issued as one gold mohur, worth sixteen sicca rupees in Calcutta, and in denominations of 100, 250 and 500 rupees. The Commerce Series introduced a vignette of an allegorical female figure personifying Commerce seated by the quay, printed on both sides, with the bank name and denomination in Urdu, Bengali and Nagri. Around the middle of the century Commerce gave way to Britannia, on notes with intricate patterns and multiple colours meant to deter forgery.

The second Presidency Bank opened in Bombay in 1840 and had a rough history: the collapse of the speculative cotton boom led to the liquidation of the Bank of Bombay in 1868. The Bank of Madras completed the trio. All three were eventually pushed out of note issue by the state.

What did the Paper Currency Act of 1861 do?

The Paper Currency Act of 1861 gave the Government of India a monopoly of note issue and ended the note issues of private and Presidency Banks. The Reserve Bank credits the policy to Sir James Wilson, the first Finance Member of the Viceroy's Executive Council, with his successor Samuel Laing substantially modifying the original proposals after Wilson's early death.

Running one paper currency across the subcontinent was a logistical problem before it was a monetary one. The Act authorised the Presidency Banks to act as agents of the Secretary of State for the issue, payment and exchange of government promissory notes, using infrastructure they already had. Those agency agreements were terminated in 1867, after which management passed in turn to the Mint Masters, the Accountant Generals and the Controller of Currency (RBI Monetary Museum, British India Issues).

Redemption over such distances produced the Currency Circle, a zone in which a note was good tender. The first British India notes, the Victoria Portrait Series, came in 10, 20, 50, 100 and 1000 rupees, printed on hand-moulded paper from the Laverstoke Paper Mills and secured by a watermark reading GOVERNMENT OF INDIA and RUPEES with two signatures and wavy lines. Transferring funds meant cutting a note in half and posting one part, then sending the second only after the first was confirmed received.

The Underprint Series and the King's Portrait notes

Forgeries killed the Victoria Portrait notes, and the unifaced Underprint Series replaced them in 1867, adding a five rupee note in response to public demand. Between 1903 and 1911 the 5, 10, 50 and 100 rupee notes were universalised so they could be encashed outside their circle of issue. The Green Series carried four language panels, the Red Series eight, with the panel languages set by the circle of issue. First World War pressure brought the first small denominations: one rupee on 30 November 1917, then the unusual two rupees and eight annas, both discontinued on 1 January 1926 on cost grounds. Those notes carried George V and were the precursors of the King's Portrait Series, whose regular issues began in May 1923 on a ten rupee note. In 1928 the Currency Note Press at Nasik opened, and by 1932 it was printing the entire spectrum of Indian notes.

When did the Reserve Bank of India start issuing notes?

The Reserve Bank of India was inaugurated on 1 April 1935 with its Central Office at Calcutta, but its first banknote appeared only in January 1938. Section 22 of the RBI Act, 1934 let the Bank keep issuing Government of India notes in the meantime. The first Reserve Bank note was a five rupee bearing the portrait of George VI.

The three-year gap has an unusual cause. Notes carrying the portrait of Edward VIII were scheduled for release in the summer of 1937, and his abdication forced a redesign that pushed the Bank's own issues into 1938. The five rupee came in January, the ten rupee in February, the hundred in March, and the 1,000 and 10,000 rupee notes in June of the same year (RBI Monetary Museum, Reserve Bank Issues).

The war reshaped the notes again. In August 1940 the one rupee note was reintroduced as a Government of India note with the status of a rupee coin under the Currency Ordinance of 1940, and a two rupee note followed on 3 March 1943. Japanese wartime operations to destabilise Indian currency involved high-quality forgeries, largely of ten rupee notes signed by Governor C. D. Deshmukh. The Bank answered by changing the watermark and moving George VI from a profile portrait to a full frontal one, and by introducing the security thread for the first time in India.

What are the Indian banknote series, issuer by issuer?

Indian paper money sorts into five issuing regimes: private and agency banks to 1832, Presidency Banks from 1806, the Government of India from 1861, the Reserve Bank from 1938, and the Republic from 1950. The table below gives the series, years, denominations, portrait or main motif and issuer for each stage.

Series, dates, denominations and motifs per the Reserve Bank of India Monetary Museum pages on early issues, British India issues and Republic India issues.

What changed on Indian notes after independence?

Independence came at midnight on 14 August 1947 but the Republic was established only on 26 January 1950, and the Reserve Bank kept issuing the existing notes through that interval. The Government of India brought out a new one rupee note in 1949, and the first Republic banknotes followed in 1950 in denominations of 2, 5, 10 and 100 rupees.

The design decision that defined modern Indian money was made early and then reversed. At the outset it was felt that the King's portrait should be replaced by a portrait of Mahatma Gandhi, and designs were prepared to that effect. In the final analysis the consensus moved to the Lion Capital at Sarnath instead (RBI Monetary Museum, Republic India Issues). Gandhi's face reached the notes later and in two stages: the commemorative centenary series of 1969, then the regular 500 rupee of October 1987. The ship motif on the reverse of the ten rupee note was kept as it was, for the sake of continuity.

The rest of the century moved in steps that each leave a collectible marker. Hindi was displayed prominently from 1953. High denominations of 1,000, 5,000 and 10,000 rupees were reintroduced in 1954 and demonetised again in 1978, for the same reasons as the 1946 demonetisation. Note sizes were reduced in 1967 as an economy measure, and a commemorative series for the birth centenary of Mahatma Gandhi appeared in 1969, showing him seated against the Sevagram Ashram. The 20 rupee arrived in 1972 and the 50 rupee in 1975. The 1980s brought a visual programme built on science and progress: Aryabhatta on the 2 rupee, an oil rig on the 1, the Konark wheel on the 20, the Hirakud dam on the 100. The 500 rupee followed in October 1987 with a Mahatma Gandhi portrait, though the watermark stayed the Lion Capital.

What is the Mahatma Gandhi series?

The Mahatma Gandhi Series was introduced in 1996 because reprographic technology had overtaken the old security features. It brought a changed watermark, a windowed security thread, a latent image and intaglio features for the visually handicapped, and it carried Indian notes through to the 2016 reform.

The series kept moving. The 1,000 rupee denomination joined it on 9 October 2000, and on 18 November 2000 the 500 rupee was reissued in a changed colour with colour-shifting ink in the central numeral. In 2005 the Reserve Bank added a wide colour-shifting machine-readable magnetic windowed security thread to the 100 rupee and above, changed the identification mark to back-to-back registration of the denomination numeral, and printed the year of printing on banknotes for the first time. Star series notes arrived in 2006 so that defective notes did not have to be reprinted with the same serial number; our guide to star notes and replacement notes explains how those work across countries.

Two later changes matter for dating a note in hand. The rupee symbol was formalised in 2010 and appeared on banknotes and coins from 2011, putting India in the small group of countries with a dedicated currency symbol. In 2015 the Bank added bleed lines on higher denominations and exploding numbers, and reintroduced the one rupee note; intaglio printing was withdrawn from the 50 and 20 rupee notes in 2016. Each of those is a hard boundary in a sequence, which is exactly what makes the series easy to build systematically.

What happened in the 2016 demonetisation?

On 8 November 2016 the Government of India, by Notification 2652, withdrew the tender status of 500 and 1,000 rupee notes of the Mahatma Gandhi Series issued up to that date. The Reserve Bank simultaneously introduced the Mahatma Gandhi (New) Series, including a new 2,000 rupee note on the same day.

The mechanics were tight. From 10 November 2016 holders could tender the withdrawn notes at any Reserve Bank office or bank branch for credit to their accounts, with over-the-counter cash exchange capped at 4,000 rupees per person against proof of identity. Withdrawals from bank accounts were limited to 10,000 rupees a day and 20,000 rupees a week until 24 November, and all cash machines stayed shut on 9 November for recalibration. The deadline for ordinary deposit or exchange was 30 December 2016 (Reserve Bank of India press release, 8 November 2016).

The replacement series broke with the old look: distinct colours per denomination and smaller sizes, with reverses chosen to highlight cultural heritage and scientific achievement. A 200 rupee denomination, new to Indian currency, was added on 23 August 2017. Then the 2,000 rupee note was retired in turn. The Reserve Bank stopped printing it in 2018-19 and announced its withdrawal from circulation on 19 May 2023, noting that the value in circulation had fallen from 6.73 lakh crore rupees on 31 March 2018, which was 37.3 percent of notes in circulation, to 3.62 lakh crore rupees on 31 March 2023, or 10.8 percent (Reserve Bank of India press release, 19 May 2023). For the wider pattern, see demonetisation events of the 21st century and our explainer on what demonetisation means.

Which Indian notes do collectors chase?

Beyond the mainstream series, Indian paper money has a set of side issues that are small, finite and well documented: the Persian Gulf notes with the Z prefix, the Haj notes marked HA, the Burma notes that were never tender in India, and the princely paper of Jammu and Kashmir and Hyderabad.

The Gulf notes exist because the Indian rupee circulated widely in the Persian Gulf and could be redeemed in foreign currency when banks there presented it to the Reserve Bank. To keep that arrangement from being exploited as India's reserves tightened, a separate series was issued in the 1950s for Kuwait, Bahrain, Qatar and the Trucial States, now the United Arab Emirates. The notes kept the contemporary design but changed colour, carried a Z prefix, came in 1, 10 and 100 rupees, and were redeemable only at the Bombay office of issue. They were withdrawn from the early 1960s as the Gulf states issued their own currencies and stopped being used around 1970 (RBI Monetary Museum, Persian Gulf Issues).

The Haj notes are the same idea for a different purpose: 10 and 100 rupee notes for Indian pilgrims in Saudi Arabia, with HAJ inscribed on the front and serial numbers prefixed HA, discontinued alongside the Gulf notes (RBI Monetary Museum, Haj Issues). The Burma notes are stranger still. Rangoon was one of the original currency circles, Burma separated from India in 1938, and under the Burma Monetary Arrangements Order of 1937 the Reserve Bank remained responsible for its note issue. In May 1938 the Bank issued distinctive Burma notes that were not tender in India, and it acted as banker to the Government of Burma until 1 April 1947, with a break during the Japanese occupation from June 1942 to 1945 (RBI Monetary Museum, Burma Issues). Of the princely states, only Jammu and Kashmir and Hyderabad issued paper currency, and many smaller states issued wartime cash coupons in place of coins (RBI Monetary Museum, Other Issues).

Condition governs price across all of it. Our banknote grading guide covers the ladder from Uncirculated down to G, and banknote security features explains the threads, watermarks and latent images that date an Indian note at a glance. Browse stock through banknotes by country, and read the collecting overview at our India banknotes hub.

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