The Indian Paper Currency Act Amendment Act, 1896

Act No. XXI (Act No. 21) of 1896 (Repealed)

Passed by the Governor General of India in Council.

(Received the assent of the Governor General on the 17th December, 1896.)

An Act to amend the Indian Paper Currency Act, 1882.

Preamble

WHEREAS it is expedient to authorise an increase of the amount which may be invested in securities of Government of India out of coin and bullion received for currency notes under the law relating to the Government paper currency; It is hereby enacted as follows:

Short title and commencement

Section 1. (1) This Act may be called the Indian Paper Currency Act Amendment, 1896; and

(2) It shall come into force at once.

Amendment of section 19, Act XX, 1882

Section 2. Section 19 of the Indian Paper Currency Act, 1882, as amended by Act No. XV of 1890 (an Act to amend the Indian Paper Currency Act, 1882), shall be read as if for the words "eighty millions" the words "one hundred millions" were substituted.

Repeal of Act XV, 1890

Section 3. Act No. XV of 1890 (an Act to amend the Indian Paper Currency Act, 1882) is repealed, but not so as to affect the validity of anything heretofore done in pursuance of the provisions of that enactment.

Explanatory Note

Overview

The Indian Paper Currency Act Amendment Act, 1896, was enacted by the Governor-General of India in Council to modify and strengthen the legal framework governing paper currency in British India. This short amendment built upon the existing Indian Paper Currency Act, 1882, by revising provisions relating to the financial management of the Currency Reserve.

Purpose of the Act

The Act’s main objective was to increase the permissible amount of Indian Government securities that could be held against currency notes issued by the Government. It responded to growing monetary needs and aimed to enhance the flexibility and stability of India’s currency system by updating the reserve requirements.

Key Provisions

Section 1: Formally titles the law as The Indian Paper Currency Act Amendment Act, 1896 and provides for its immediate commencement.

Section 2: Amends Section 19 of the Indian Paper Currency Act, 1882, by raising the limit for investment in Government of India securities from eighty million rupees to one hundred million rupees.

Section 3: Repeals the Indian Paper Currency Act Amendment Act, 1890 (Act No. XV of 1890), which had earlier amended the same section, while preserving the legal validity of any actions previously taken under that repealed law.

Significance

This amendment was an important milestone in the evolution of India’s colonial monetary policy. It allowed for a larger portion of coin and bullion reserves to be converted into government securities, reflecting increased economic activity and the expanding role of paper currency. The Act also demonstrated legislative adaptability in maintaining the strength and liquidity of the Currency Reserve.

Conclusion

The Indian Paper Currency Act Amendment Act, 1896, was a concise yet impactful reform that improved the management of India’s paper currency reserves. By allowing greater investment in government securities, it supported monetary confidence and fiscal efficiency during a time of economic growth and institutional consolidation under British rule.