Paper money needs to he designed and made in such a way that it is very difficult to forge. Banknotes have extremely complicated designs, with pictures and backgrounds made up of very fine lines and patterns. These are printed from hand-engraved steel plates. The notes are also printed on a special type of paper, which is hardwearing and has a strip of plastic or metal embedded in it.

Banknote Design

The banknote design typically starts with the compiling and reviewing of historical information, images, Thai patterns, and other elements related to the main theme to be depicted on a banknote. In early days, due to the limited availability of equipment and tools, each new banknote design was to be hand - drawn elaborately in color. To this day, banknote designers still need to possess both artistic skillfulness and computer expertise to create the best design and origination for a banknote. In designing banknote, factors to be considered are:

  • Gracefulness 

  • Convenience

  • Cultural identity 

  • Technical limits 

  • Counterfeit deterrence feature


Having obtained the design, hand engraving of metallic plates and drawing of design of the original plate is performed by highly skilled and experienced specialists so as to achieve the high degree of precision, tonal variation and perspective requirements for banknotes. The background patterns, formerly etched by machine, are now created by computer programs.


    1)  Offset Printing?

The background design is printed first by dry offset on a specially designed printing press that is able to print high-precision color patterns on both sides of the sheets simultaneously.  This makes it possible to produce perfect front and back registered designs or see through designs when viewed against transmitted light, one of efficient techniques to discourage counterfeiting.? 

    2)  Intaglio Printing?

This process is used to add the portrait of H.M. the King and other raised prints on the front of the note. The image to be printed is inscribed into the plates. The inscriptions are filled with ink, and excess ink is wiped from the plates. Heavy pressure is applied to transfer the ink from the plates to the pager, leaving the surface slightly raised. This process gives banknotes a tactile feel to the touch, proven to be very effective in counterfeit deterrence.?

   3) Letterpress Printing ?

Every printed sheet is carefully inspected. The good sheets are sent to printed serial number and signature by letterpress method, while imperfect or bad sheets are taken out of the system to be duly destroyed. The printing machine also has electronic numbering control to protect from miss - printing the numbering. This type of control helps prevent the repeat of numbering printed on each banknote of the same category.

Printed Sheet Inspection ??

The bank sheet then passes through a quality inspection and verification process that is one of the most important steps of the entire banknote production process. The inspection process is a process that screens good quality, partially damaged and mis-printed bank sheets from each other.  Also, the quantity of sheets produced is assured by counting and verifying after finishing the inspection process.    

The inspection and verification process is a process of screening the bank sheets into 3 categories;            

1. Good quality sheet are those where every individual banknote has met the quality standard, which are then separated into the "good numbering" printing category.

2. Partially damaged sheets are those that most parts pass the quality standard. This set will be separated into the "partial numbering" printing category.

3. Bad sheets are those that do not pass the quality standard. This set of banknotes is sent to be destroyed and the number of replacement sheet is carefully matched to the number destroyed. 

After serial numbering, the 100 % good sheets move on to cutting and packaging. Partially good sheets are cut, and defective notes are sorted out and replaced by special notes before being shrink - wrapped for delivery.

Where would you use a rouble, yen, rupee, drachma and guilder?

You would use a rouble in the Soviet Union, a Yen in Japan, a rupee in India and Pakistan, a drachma in Greece, and a guilder in Holland. They are all units of the monitory systems of those countries.

     The rouble, which is divided into 100Kopeks, was the name for silver bar money which was in use in Russia from the 14th to the 17th century. Peter the great set up the modern system of coins, and the silver bar money was abolished.

     The Yen was originally a gold coin, but was changed to silver. A one Yen coin is now made of aluminum and the five and ten yen pieces are made of nickel.

    The word rupee means “silver coin”. It came into use in 1542 when the Sultan of Delhi, Sher Sha, reorganized the currency. It was kept as a monitor unit and is now divided into 100 noye paise (new paisas). Large amounts of rupee have special names: a lakh is 100,000 and a crore is ten million rupees.

    The drachma, in Ancient Greece was a silver coin and also a measure of weight. There were 100 drachmae to one mina which weighted about one pound. The modern drachma is divided into 100 lepta.

        The guilder, which is the currency of the Netherlands and its overseas territories, is divided into 100%. This unit of currency spread to Northern Europe from Florence in Italy and is also used under the name of florin

How does a currency counting machine work?

          There are thousands of banks in the world where currency notes are counted and packed in the denominations of hundreds. Job of counting and packing is done by a large number of people. The job of counting the currency notes is quite boring. Scientists have developed a machine which automatically counts and packs the currency notes. This machine is a wonder of electronics.

          Working principles of a currency counting machine is shown schematically in the figure. The bundle of notes to be counted is placed on platform P-1. These notes are pushed in the forward direction by a feeding roller R-1. These notes are counted by a sensor S-1. Thereafter the notes pass through the rollers R-2 and R-3 and channel C-1. Through the channel the notes reach the sensor S-2. In case of any error in counting, S-2 will shut the motor automatically and display the mistake. After sensor S-2, rollers R-4 and R-5 pick up the notes and throw them into the slots of the centrifuge roller. These notes are released as they reach the platform P-2 and start stacking upon it. This platform is equipped with another sensor S-3 which indicates whether P-2 is empty or loaded.

           It is a microprocessor based machine and hence its reliability is very high. These machines can not only count currency notes but also the coins. These are portable machines and can be installed anywhere. Nowadays these machines are being used by many banks.

When did people first use money?

          Money has always fascinated mankind from the time of Aristotle to the present day. Aristotle observed that man is a social being and establishes certain norms and regulations for their social interaction. Men employed money as a mode of exchange to facilitate such social dealings from their economical aspect.

          In the primitive societies, when people wanted to buy anything they had to give something else in exchange for it. For example, if a potter wanted to buy rice from a farmer, he offered him earthenware pots in exchange. The farmer would accept them because he needed pots. This was called the barter system which involved goods in exchange of goods. During those times goods served the purpose of money. But with the development of trade, the barter system could not meet the growing demands of a convenient exchange system for buying and selling. People started using token or symbolic goods in exchange all over the world. American Indians used beads of shells, Fijians used whale’s teeth and North Americans used tobacco in their exchange system. The Roman army men were provided salt for their services. But the topic of our interest is: when was coin first used as money? 


Continue reading "When did people first use money? "

How did banks start?

The word ‘bank’ is derived from the Italian word ‘Banco’ which means bench. In the Middle Ages, Italians used to conduct their commercial transactions while sitting on the bench. Later, this very word ‘banco’ underwent changes and became ‘bank’. Now, all the countries of the world have banking systems. Do you know how the banks started?

               Initially money lending and banking was done by the Jews and later on by goldsmiths. Merchants, in fact, paid the goldsmiths to look after their surplus cash. These goldsmiths gave receipts like a bank note to the merchants for the cash, they deposited with them. Not only that, they could lend a part of that money to others earning an interest from them. They could thus make extra money. A part of thus earned money, they gave to the merchants as an incentive to deposit money with them. This was the starting point of the savings bank or the deposit scheme in the banks at a later date.

                 Merchants also wrote letters to the goldsmiths to pay another merchant from their deposited money. This amounted to issue of “cheques”. The modern banking system started in Venice in 1587, and in the same year the “Banco di Rialto” was established. People could deposit money in this bank and could draw when they needed it. In 1619 ‘Banco di Giro’ took over the management of this bank. People could deposit even their gold and silver items in this bank for which the bank issued receipts. These receipts were used as currency notes.

                 The first bank in the U.S.A. was set up in Philadelphia in the year 1782. In England, the first bank was started in the year 1825. In India, the first bank, the Presidency Bank of Bombay, was established in 1804.

                  However, the first full-fledged Indian bank was the Punjab National Bank, which was started in 1894. The Government established the Reserve Bank of India in April 1935. This bank issues all the currency notes and coins for circulation in the country. Today, a large number of banks have been established in all the countries of the world.

                  In the beginnings, Banks had only two functions, namely to receive money and to give loans on interest. Nowadays, Banks serve many other purposes such as giving credit cards and foreign currency to people going abroad. Banks also provide us the facility of lockers to keep our valuable jewellery.