By Thakor Abhijeet Jasrotia
The Indian rupee (symbol ₹; code: INR) is the official currency in the Republic of India. The rupee is subdivided into 100 paise (singular: paisa).
The issuance of the currency is controlled by the Reserve Bank of India. The Reserve Bank manages currency in India and derives its role in currency management on the basis of the Reserve Bank of India Act, 1934.
Rich history and legacy
The Indian Rupee has a rich history and legacy.
The history of the Indian rupee traces back to ancient India in circa 6th century BCE. Ancient India was one of the earliest issuers of coins in the world, along with the Chinese wen and Lydian staters.
Arthashastra, written by Chanakya, prime minister to the first Maurya emperor Chandragupta Maurya (c. 340–290 BCE), mentions silver coins as rūpyarūpa. Other types including gold coins (suvarṇarūpa), copper coins (tamrarūpa) and lead coins (sīsarūpa) are mentioned.
Rūpa means ‘form’ or ‘shape’; for example, in the word rūpyarūpa: rūpya ‘wrought silver’ and rūpa ‘form’.
The Gupta Empire produced large numbers of silver coins clearly influenced by those of the earlier Western Satraps by Chandragupta II.
Rupee for International trade with India
On eve of 76th Independence Day of India the Indian rupee is shining .
More than 18 countries have agreed to use Rupee for international trade with India. After this more than 35 countries have shown their interest to trade in Indian Rupee.
The global importance of the Indian Rupee has risen in the last few years after India-Russia, India-UAE and India-Singapore agreements on trade deals in INR. This has also led to a decrease of the use of dollars in international trade.
Some days back, Indian government announced the approval for banks from 22 partner nations, including Russia and the United Kingdom, to establish “vostro” accounts within India.
This move aims to enhance the rupee trade by facilitating international banking services for clients with global banking needs.
As a matter of fact, vostro” account is an account held by domestic banks for foreign banks in the local currency. It serves as a mechanism for domestic banks to cater to the international banking requirements of their clients.
This concept falls under correspondent banking, wherein a bank (or intermediary) conducts wire transfers, commercial transactions, deposit acceptance, and documentation collection on behalf of another bank.
Sri Lanka has included Indian rupee in its list of designated foreign currencies while with Bangladesh a new mechanism has been launched last month to settle trade in Indian rupees, Minister of State for Commerce and Industry Anupriya Patel said in a reply to a question in Lok Sabha.
British East India Company (EIC) was given right in 1717 CE to mint coins in the name of the Mughal emperor Farrukhsiyar on the island of Bombay. By 1792 CE the EIC demonatized all other coins till they were reduced to only 3 types of coins, i.e. EIC, Mughal & Maratha coins.
After EIC expanded its control over India, it brought the “Coinage Act of 1835” and started to mint coins in the name of British king.
EIC rule was replaced by British Crown raj which brought the “Paper Currency Act of 1861” and the “Uniform Coinage Act of 1906”.
After 2021, the government of independent India amended “The Coinage Act, 2011”,the “Foreign Exchange Management Act (FEMA), 1999,” the “Information Technology Act, of 2000″ and the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021”.
Internationalising the rupee
The economic pulse is that
internationalizing the rupee is a beneficial goal for India, but it requires overcoming practical challenges and building credibility in the global economy.
While the dollar’s position may face some scrutiny, it is expected to remain the leading global currency for the foreseeable future.
But in the 76th Independence year of India, the rupee has a good future.
(Thakor Abhijeet Jasrotia is the Spokesperson of BJP J&K UT)
