History of Bangladesh Currency (Taka) is really interesting and worth researching…

Came across this article on an exhibition on Bangladesh history organised by the Bangladesh Deputy High Commission, Karachi.

The section comprising banknotes was also well-appreciated; Bangladesh Bank over the years has been changing the design of the banknotes in different denominations. Taka one first issued in 1973 had a typical Bengali woman pounding rice on one side of the note. Commemorative notes of 100 years of Bangladesh National Museum 1913-2013 were also displayed.

This got me thinking. After all, Bangladesh as East Pakistan shared its currency with West Pakistan. There were two branches of State Bank of Pakistan as mentioned in history of Bangladesh central bank:

With the collapse of the gold standard after World War II, central banks became much more widespread. The banking system at our independence consisted of two branch offices of the former State Bank of Pakistan established in July 1948: one was in Bangladesh (former East Pakistan) and the other was in West Pakistan (present Pakistan).

Until 1971, the currency was called as both Rupee and Taka. Taka has a long history in Bengal. This is how the notes looked:

The after the liberation war, Taka became the official currency of Bangladesh. There is some interesting history on wikipedia on the evets:

After the Partition of Bengal in 1947, in East Bengal, which later became the eastern wing of Pakistan union and was renamed to East Pakistan in 1956, the Pakistani rupee also bore the word taka on official notes and coins. Bangla was one of the two national languages of the Pakistan union between 1956 and 1971 (the other being Urdu in West Pakistan). The Bangladeshi taka came into existence since 1972, a year after the independence of the eastern wing of the union, as the independent nation of Bangladesh.

Prior to the Liberation war in 1971, banknotes of the State Bank of Pakistan circulated throughout Bangladesh, and continued to be used in Bangladesh even after independence for only about three months until the official introduction of the taka on 4 March 1972. During the war, it was an unofficial practice of some Bengali nationalists to protest Pakistani rule by stamping banknotes with “বাংলা দেশ” and “BANGLA DESH” as two words in either Bangla or English. These locally produced stamps are known to exist in several varieties, as are forgeries. On 8 June 1971, the Pakistani government declared that all banknotes bearing such stamps ceased to be legal tender. Furthermore, to prevent looted high-denomination notes from disrupting the Pakistani economy, the government also withdrew the legal tender status of all 100- and 500-rupee notes.[2]

Some foreign publications mention that there were rubber stamp “BANGLA DESH” overprints on different denominations of Pakistani bank notes during the a.m. period[clarification needed]. It may be mentioned that Pakistani postage stamps were rubber-stamped and used all over Bangladesh until 30 March 1973, but Bangladesh Bank or the Ministry of Finance never issued an order to overprint or rubber-stamp Pakistani currency.[3] It would be interesting to note here, that a counterfeiting gang is active, which uses a “washing system”, whereby Tk100 notes are washed with a special kind of liquid, and the numbers are changed to give it the appearance of a Tk500 note.[4]

Just fascinating stuff. We ignore currency and monetary systems in case of wars and partitions. But they are so central to everything happening.

In case of India’s partition, there was an agreement between the two sides over the transition of currency functions. The agreement broke down sooner leading to State Bank of Pakistan coming up three months earlier on 1-July-1948 (it recently celebrated its 70th anniversary).

This was not the case in Bangladesh. The central bank was started on 16 December 1971 just when the war ended. How Bangladesh Central bank must have tided over the crisis must be as riveting a story as the political crisis in the region.

The history will tell us how to make a monetary union work and then how it disintegrates…..

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