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THE INDIAN
CURRENCY
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History of Indian
Currency
India was one of the earliest issuers of coins (circa 6th century BC).The first "rupee" is believed to have been introduced by Sher ShahSuri (1486-1545), based on a ratio of 40 copper pieces (paisa) perrupee. Among the earliest issues of paper rupees were those by theBank of Hindustan (1770-1832), the General Bank of Bengal andBihar(1773-75, established by Warren Hastings) and theBengalBank(1784-91), amongst others.
Historically, the rupee, derived from the Sanskrit word raupya, whichmeanssilver, was a silver coin.
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The history of Indian
currency
In 1861, the Government of India introduced its firstpaper money, 10 rupee notes. These were followed by 20rupee notes in 1864, 5 rupees in 1872, 10,000 rupees in1899, 100 rupees in 1900, 50 rupees in 1905, 500 rupeesin 1907 and 1000 rupees in 1909. In 1917, 1 and 2rupees notes were introduced.
The Reserve Bank of India began note production in1938, issuing 2, 5, 10, 100 and 1000 rupee notes, whilethe Government continued to issue 1 rupee notes
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Features Of Bank
Notes
What are the general features of bank notescurrently in circulation?
Rs.10, Rs.20, Rs.50 and Rs.100 notes issued earlier and which are still incirculation contain the Ashoka Pillar watermark and Ashoka Pillar effigy.The Rs.500 notes issued earlier i.e. since 1987 bear the Ashoka Pillarwatermark and the Mahatma Gandhi portrait. The Reserve Bank is nowissuing bank notes in Mahatma Gandhi series. This means that the notescontain Mahatma Gandhi watermark as well as Mahatma Gandhi'sportrait. The Rs.5 notes re-introduced in August 2001 also bear theAshoka Pillar watermark and Ashoka Pillar effigy. All these notes issuedby the Bank are legal tender.
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Special Security
Features of Bank Notes
i)
I) Security thread: Rs.10, Rs.20 and Rs.50 notes contain a readable but fullyembedded security windowed security thread. Rs.100, Rs.500 and Rs.1000 notescontain a readable windowed security thread. This thread is partially exposed andpartially embedded. When held against light, this thread can be seen as onecontinuous line. Other than on Rs.1000 notes, this thread contains the words'Bharat' in the devnagri script and 'RBI' appearing alternately. The security threadof the Rs.1000 note contains the inscription 'Bharat' in the devnagri script, '1000'and 'RBI'.
ii) Latent Image: A vertical band behind on the right side of the MahatmaGandhis portrait, which contains a latent image, showing the denominationalvalue 20, 50, 100, 500 or 1000 as the case may be. The value can be seen onlywhen the note is held on the palm and light allowed to fall on it at 45r ;otherwise this feature appears only as a vertical band.
iii) Micro letterings: This feature appears between the vertical band andMahatma Gandhi portrait. It contains the word RBI in Rs.10. Notes of Rs.20and above also contain the denominational value of the notes.
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Special Security Features of
Bank Notes
iv) Identification mark: A special intaglio feature has been introduced on the left of
the watermark window on all notes except Rs.10/- note. 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)
v) Intaglio Printing: The portrait of Mahatma Gandhi, 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 in Rs.20, Rs.50, Rs.100,
Rs.500 and Rs.1000 notes.
vi) Fluorescence: The 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.
vii) Optically Variable Ink: The numeral 500 & 1000 on the Rs.500 and
Rs.1000 notes are printed in Optically Variable Ink viz., a colour-shifting ink.
The colour of these numerals appear green when the notes are held flat but would
change to blue when the notes are held at an angle.
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Some Frequently Asked
Questions
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At present, notes in India are issued in the denomination of Rs.5, Rs.10,Rs.20, Rs.50, Rs.100, Rs.500 and Rs.1000. These notes are called banknotes as they are issued by the Reserve Bank of India (Reserve Bank).
The printing of notes in the denominations of Re.1 and Rs.2 has beendiscontinued as these denominations have been coinised. However, suchnotes issued earlier are still in circulation.
The printing of notes in the denomination of Rs.5 had also beendiscontinued; however, it has been decided to reintroduce these notes so as
to meet the gap between the demand and supply of coins in thisdenomination.
What are the present denominations of
bank notes in India?
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Watermark Security Thread
Latent Image Microlettering
Intaglio Identification Mark
Fluorescence Optically Variable Ink
ecur y ea ures o n an an no es
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BANKINGCommercial banks which provide various types of financial services to
customers in return for payments in one form or another, such as interest,
discounts, fees, commission and so on. Its objective is to make profits.
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Definition
Acc to CrowtherA commercial bank is an institution which collects money from
those who have it to spare or who are saving it out of their
income and lend, this money out to those who require it.
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According to Banking Regulation Act of 1949, Section 5(1) (b)
defines
accepting for the purpose of lending or investing, of deposit of
money from public, repayable on demand or otherwise,
withdrawal by cheques, drafts and order.
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Functions
1. Acceptance ofD
eposits
a. Savings bank A/c deposits
b. Current bank a/c deposits
c. Fixed Deposits Account
d. Recurring Deposits account
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2. Advancing of Loans
a. Overdraft
b. Cash Credit
c. Term Loans
d. Discounting of Bills
3. Agency Functions
a. Collecting of Money.
b. Making of payments
c. Buying and Selling Securities
d. Arranging Transfer of funds
e. Bank act as a Trustee, Executor and administrator.
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4. General Utility Services
a. The banks provide Safe deposit locker.
b. Providing Travellers cheque
c. Act as an underwriters
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Commercial Banks in India
Public Sector Private Sector
State bank of India -Indian banks
RRB - Foreign banks
Nationalized Banks
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Nationalization of Banks in India:
The banks nationalized on 19th July
1969 were, Central bank
Bank of India
Punjab National Bank
Bank of Baroda
UnitedCommercial Bank
Canara Bank
United Bank of India
Dena Bank
Syndicate Bank
Union Bank of India
Allahabad Bank
Indian Bank
Bank of Maharastra
Indian Overseas Bank.
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The six banks nationalized were,
Andhra Bank
Corporation Bank
New Bank of India
Oriental Bank ofCommerce
Punjab and Sind Bank
Vijaya Bank.
(As a result of the merger of New Bank of India with Punjab
National Bank, the number of nationalized commercial bankshas reduced from 20 to 19)
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Sources of funds ofCommercial
banks
Deposits in the form of Savings
Borrowing funds from Reserve Bank of India
Borrowing from other banks
Interest on Loans and Advances
Profits from business operations
Income from Agency services
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