Even as the economy is grappling with the domonetisation of Rs 500 and Rs 1,000 currency notes, let us look at how the modern currency came into being. Though broader preference was for silver coins, the directors of the East India Company were not opposed to circulation of gold coins as such. The Act of 1835 permitted the minting of gold coins of the same weight and fineness as the silver rupee. These notes were not national legal tender and their circulation was confined to the Presidency towns.Members of trade bodies still favoured the introduction of currency notes. After several years of debate, the Paper Currency Bill was enacted in 1861 which gave the government the sole right to issue notes.

Source: Economic Times April 11, 2017 19:30 UTC