The document provides an overview of the Indian rupee, including its history, minting and printing processes, security features, valuation in foreign exchange markets, and recent trends. It discusses how the rupee evolved from commodity money to its current form and outlines the security features of modern banknotes. Recent declines in the rupee's value are attributed to factors like high imports, inflation, and slowing economic growth. The Reserve Bank of India has implemented measures to control the rupee's fall, like liberalizing deposit schemes and promoting exports.
3. Introduction
“Money is any object or record that is generally accepted as
payment for goods and services and repayment of debts in a
given socio-economic context or country”
Indian Currency- Indian Rupee (INR)
Origin of the word "rupee" is found in the Sanskrit word rūp or
rūpā, which means "silver“
4. Introduction
Design
Udaya Kumar-The designer
The design resembles both the Devanagari letter “र" (ra)
and the Latin capital letter "R", with a double horizontal
line at the top.
र
5. Introduction
Rupee- Mauritius, Nepal, Pakistan, Seychelles, and Sri
Lanka.
The Indian Rupee- India.
The original Rūpaya was a silver coin weighing 178gm.
Controller- Reserve Bank of India.
The ISO 4217 code for the India Rupee is INR.
In India- Rupee, Rupaye, Rubai and Taka.
6. History
What was before 'Money'?
Barter System!!!
To barter is to exchange goods without involving money.
9. History
Drawbacks of the Barter System
No double coincidence of wants
No specific unit of value
No specific unit of measurement
Inability of divisibility of goods
Inability to transport goods
10. History
Stages of Evolution of Money
Commodity Money
Metallic Money
Paper Money
Notes and Coins
Electronic Money
12. History
Entry of Rupee
During 3rd century BC under the rule of Mauryan
Empire there is a mention of:
Silver coins - Rupyarupa
Gold coins - Suvarnarupa
Copper coins - Tamararupa
Lead coins - Sisarupa
13. History
During 1540-1545 Afghan king Sher Shah Suri issued a
coin of silver, weighing 178 grains
The silver coin remained in use during the Mughal
period, Maratha era as well as in British India.
14. History
Princely states of pre colonial India minted their
own coins resembling silver coins but with
regional distinctions
15. History
British Age
Early English coins had 3 broad strands in Bombay, Madras,
Calcutta.
Coinage Act-1835: Uniform coinage issued.
Coinage Act-1906: Governed the Mint establishments,
Standards to be maintained (Rupee 180 grains, Silver 916.66
standard; Half Rupee 90 grains).
World War-I: Due to acute shortage of silver, paper currency
was introduced.
RBI-1935: Established to respond to economic troubles after
world war II.
16. History
The values of the subdivisions of the rupee during British rule (and
in the first decade of independence) were:
1 rupee = 16 anna (later 100 naye paise)
1 artharupee = 8 anna, or 1/2 rupee (later 50 naye paise)
1 pavala = 4 anna, or 1/4 rupee (later 25 naye paise)
1 beda = 2 anna, or 1/8 rupee (later equivalent to 12.5 naye paise)
1 anna = 1/16 rupee (later equivalent to 6.25 naye paise)
1 paraka = 1/2 anna (later equivalent to 3.125 naye paise)
1 kani (pice) = 1/4 anna (later equivalent to 1.5625 naye paise)
1 damidi (pie) = 1/12 anna (later equivalent to 0.520833 naye
paise)
17. History
In 1957, the rupee was decimalised and divided into
100 naye paise.
In 1964, the initial "naye" was dropped.
Many still refer to 25, 50 and 75 paise as 4, 8 and 12
annas respectively.
20. Minting
Coins are minted at the five India Government Mints at
Mumbai, Alipore (Kolkata), Saifabad (Hyderabad),
Cherlapally (Hyderabad) and Noida (UP).
21. Minting
Denominations
Presently being issued - 50 paise, one rupee, two rupees,
five rupees and ten rupees.
Small coins- Coins upto 50 paise.
Rupee coins- Coins of 1 Rupee and above.
The coins issued under the authority of Section 6 of The
Coinage Act, 2011.
22. Minting
Distribution
Coin Dispensing Machines.
Dedicated Single window counters - issuing coins of
different denominations.
Mobile counters - soiled notes can be exchanged for
coins.
23. Minting
Measures to improve the supply of coins
Mints in the country have been modernised and
upgraded.
Imported coins to augment the indigenous production.
Notes in denomination of Rs.5 have been reintroduced to
supplement the supply of coins.
24. Appeal to the Public
“Members of public are requested to avoid holding on to
coins and instead, use them freely for transactions to
ensure that there is a smooth circulation of coins”
25. Printing
Denominations Printed ` 10, ` 20, `50, ` 100 ` 500, and
`1000
Old denominations still in use- ` 1, ` 2 and ` 5
Issued by RBI and Guaranteed by Central Government
subject to provisions of sub-section (2) Section 26 of RBI
Act, 1934.
26. Printing
Cost of Printing of currency notes
Denomination
Cost of Production (in `)
5
0.47
10
0.96
20
1.46
50
1.81
100
1.79
500
3.58
1000
4.06
27. Minting & Printing
Currency Management
Role of the Reserve Bank of India?
Role of Government of India?
Who decides on the figure to be printed on a new note?
What happens to the old design notes when a new design
is introduced?
Are old notes issued by the Reserve Bank of India
worthless?
What was the highest denomination note ever printed?
28. Minting & Printing
Currency Management
What is the role of RBI in issue of coins?
Who is responsible for changing the design of coins from
time to time?
What is currency paper made of?
Who decides on the volume and value of banknotes to be
printed and on what basis?
Who decides on the quantity of coins to be minted?
How does the Reserve Bank estimate the demand for
banknotes?
29. Minting & Printing
Currency Management
Where are notes and coins produced?
How does the Reserve Bank reach the currency to
people?
What is a currency chest?
What is a small coin depot?
What happens when the banknotes and coins return from
circulation?
From where can the general public obtain banknotes and
coins?
32. Soiled and Mutilated Banknotes
Imperfect banknote: Wholly or partially shrunk, washed,
altered or indecipherable
33. Soiled and Mutilated Banknotes
Can soiled and mutilated banknotes be exchanged for
value?
Where are soiled/mutilated banknotes accepted for
exchange?
How much value would one get in exchange of soiled
banknotes?
How much value would one get in exchange of mutilated
banknotes?
How much value would one get in exchange of imperfect
banknotes?
34. Soiled and Mutilated Banknotes
What types of banknotes are not eligible for payment
under the Note Refund Rules?
Is the serial number used when assessing the value of a
damaged banknotes?
What if a banknote is found to be non-payable?
36. Security Features
Watermark
The Mahatma Gandhi Series of banknotes contain the
Mahatma Gandhi watermark with a light and shade effect
and multi-directional lines in the watermark window.
37. Security Features
Security Thread
When held against the light, the security thread on
Rs.1000, Rs.500 and Rs.100 can be seen as one
continuous line.
The Rs.5, Rs.10, Rs.20 and Rs.50 notes contain a
readable, fully embedded windowed security thread
with the inscription ‘Bharat’ (in Hindi), and ‘RBI’.
38. Security Features
Latent Image
A vertical band contains a latent image showing the
respective denominational value in numeral.
The latent image is visible only when the note is held
horizontally at eye level.
40. Security Features
Intaglio Printing
The portrait of Mahatma Gandhi, the Reserve Bank seal,
guarantee and promise clause, Ashoka Pillar Emblem on
the left, RBI, Governor's signature are printed in intaglio
i.e. in raised prints, which can be felt by touch, in Rs.20,
Rs.50, Rs.100, Rs.500 and Rs.1000 notes.
41. Security Features
Identification Mark
This feature is in different shapes for various
denominations (Rs. 20-Vertical Rectangle, Rs.50-Square,
Rs.100-Triangle, Rs.500-Circle, Rs.1000-Diamond)
Helps the visually impaired to identify the denomination.
42. Security Features
Fluorescence
Number panels of the notes are printed in fluorescent
ink. The notes also have optical fibres. Both can be seen
when the notes are exposed to ultra-violet lamp.
43. Security Features
Optically Variable Ink
Incorporated in the Rs.1000 and Rs.500 notes.
The colour of the numeral 1000/500 appears green when
the note is held flat but would change to blue when the
note is held at an angle.
44. Security Features
See through Register
The design will appear as floral design when seen against
the light.
Printed both on the front (hollow) and back (filled up) of
the note
45.
46. Security Features
Does possession of a forged note attract the
punishment of fine or imprisonment?
What are the actions taken by the Reserve Bank of
India to train general public to distinguish genuine
banknotes from forged notes?
47. Valuation of Rupee In Forex Market
Today’s rate: 1$ = 61.88 INR
Exchange rate is the rate at which the one currency is
exchanged for another
How is the price of the Currency Determined ?
The change in the demand and supply of the
currencies has a direct influence on the exchange rate.
48. Valuation of Rupee In Forex Market
Factors Influencing demand and supply of
currency
Expected Inflation Difference Between the two countries
Interest Rate Factor
RBI Intervention
Market sentiments
Speculation
Imports and Exports
Public Debt/Fiscal policy
49. Valuation of Rupee In Forex Market
S
Foreign Exchange Rate
(Rupee price of Dollars)
D
S1
1$=Rs60
1$=Rs55
D
S
S1
Quantity of Dollars
50. Trend analysis
Rupee- 1947-2013
1947:
1 ` =1 Sterling
1948-1966: 1 US$= ` 4.79
1966:
1 US $= ` 7.50
Aug 1971: Rupee's link with Sterling broken; tied to US
Dollar directly
Dec 1971 : Dollar devalued, Rupee tied to Sterling
again.
1975:
1$ = ` 8.39
53. Fall of rupee
In 2013 the rupee slumped to a record low near 69 to the
dollar
Since June, FIIs have pulled out $8.7 billion from the
debt market, but only $3 billion from the equity
segment
GDP had touched 4.8% to its lowest in the last decade
54. Fall of rupee
Other factors
Current account deficit
Strengthening of dollar in US economy
Inflation
High Imports
Ineffective economic policies
Insufficient inflow and outflow of funds
Did the Indian government deliberately allow the rupee
to fall?
55.
56.
57. Fall of Rupee
Result
Q. The fall in the rupee's value against the US dollar is
because of 1. Global economic slowdown:
19.9 per cent
2. Incompetence of Indian authorities: 39.3 per cent
3. Both:
40.7 per cent
58. Fall of Rupee
Impacts of fall of rupee
Triggers inflation
Hits investor sentiment
Creates burdens for organization with high exposure to
foreign debt.
Importers/Exporters
Imported goods
Fuel price
59. Fall of Rupee
Impacts of fall of rupee
RBI’s monetary policy
Students studying abroad
Tourism
Overseas Indians
Country’s fiscal health
61. “We Invented money and we use it, yet we cannot
understand its laws or control its actions. It has a life
of its own.”
-Lionel Trilling.
62. Controls/Measures adapted to
control the fall of Rupee
Liberalisation of Bank Deposit Schemes.
Reduction in Import of Gold, Silver and Oil.
Tightened Liquidity of rupee in Banking System.
Increase of Capital Inflows to the Country.
Promotion of Exports.
Increase of Interest Rates of Banks to its Customers.
Ban of Duty free import of flat screen Telephones.
Selling of Infrastructure Bonds.
63. Conclusion
The Indian Rupee has depreciated significantly against the US
Dollar marking a new risk for Indian economy. Grim global
economic outlook along with high inflation, widening current
account deficit and FII outflows have contributed to this fall.
RBI has responded with timely interventions by selling dollars
intermittently. But in times of global uncertainty, investors
prefer USD as a safe haven. To attract investments, RBI can
ease capital controls by increasing the FII limit on investment
in government and corporate debt instruments and introduce
higher ceilings in ECB’s. Government can create a stable
political and economic environment. However, a lot depends
on the Global economic outlook and the future of Eurozone
which will determine the future of INR.