The Early Paper Money of Ceylon (Modern-Day Sri Lanka)

Recently, I took some time to reorganize my personal library, a large portion of which is devoted to paper money. While doing so, I came upon a small book I purchased several years ago, titled Ceylon Currency – British Period 1796-1936, by B.W. Fernando, published in Colombo in 1939. A 68-page hardcover book originally available for 2 ½ Rupees, it contains a wealth of information on coins of the period. Quite unusually for a numismatic reference published in the 1930s, it also contains several chapters on paper currency, from the earliest issues under British rule in the late 18^th century to the notes that were in circulation in Ceylon (today more commonly known as Sri Lanka) at the time. Several notes are reproduced in black and white using high-quality photographs, along with several plates of coins reproduced in black and white. Flipping through the book, I realized that the history of paper money in Sri Lanka is very interesting, and I figured a blog would be a good way to introduce more people to these compelling issues.

Human presence in Sri Lanka goes back several hundred thousand years, and numismatic history several thousand years (notably, Roman trade had a big influence, with Roman coins and their imitations circulating extensively on the island). But for our discussion, we will focus on paper money, which was first issued in Ceylon in 1785. At the time, Ceylon was under Dutch control, which extended to most of the island’s coastal areas from 1640 to 1796 (they were never able to conquer the Kingdom of Kandy, a monarchy in the center of the island founded in the 15th century). Like elsewhere in Asia (especially in modern-day Indonesia), the Dutch East India Company in Ceylon operated as a semi-governmental authority.  As such, it was responsible for economic matters, which prompted the issuance of several Kreditbrieven (Credit Notes), payable to bearer and carrying 3% interest. After the British invaded Ceylon in late summer 1795, the Dutch issued a series of small-denomination notes for everyday circulation.  These were followed by various similar government issues in the early 19^th century after the British took control of the island (quite unusually, they also took responsibility for the Dutch Kreditbrieven, which essentially turned into long-term bonds). Any of these early notes from Ceylon discussed in this paragraph are extremely rare and seldom offered.

After a handful of different government issues in the early 19^th century the government allowed private banks to issue paper money starting in 1844. Numerous commercial banks, most of which had been established elsewhere in Asia, seized the opportunity to issue paper money at their branches in Ceylon. These included the Oriental Bank, the (Chartered) Mercantile Bank of India, London and China, and the Asiatic Bank Corporation. Most of these issued only limited quantities of paper money for circulation in Ceylon, except for the Oriental Bank Corporation, which issued notes into the 1880s. However, that institution failed in 1884, causing an economic crisis. The government saw no option but to guarantee the notes in circulation and recommended a new government issue (it had not issued notes itself since the 1850s). The private banknotes were soon withdrawn and could be exchanged for government issues from February 15 to March 31, 1885. It was this exchange period that, no doubt, made these private bank issues so rare today.

In 1885, the Ceylon Currency Board was established, taking over the issuance of all paper money on the island. Until 1926, the notes retained their identical design. Printed by Thomas de la Rue in London, the notes were uniface and featured a design similar to the contemporary notes in circulation in nearby India. Denominations issued ranged from 5 Rupees to 1000 Rupees. Lower denominations of different designs were introduced during World War I, when Ceylon faced coin shortages, prompting the need for smaller denominations. In 1925, a more colorful series was introduced, which also featured a back design of a forward-facing elephant.  The design remained essentially the same, and these notes continued to be printed by Thomas de la Rue.

In 1941 a new series of notes was introduced that brought drastic changes to the currency in circulation in Ceylon. For the first time, the portrait of the British Monarch, King George VI appeared on the notes. The notes were more colorful and featured local scenes from across the island on the back. Also notable is that the notes were no longer printed in England but in nearby British India at the India Security Press. According to some sources, this was done because of the outbreak of World War II. However, extremely rare 1938 notes with the same design indicate that the change was planned before the outbreak of World War II. Many different varieties and dates exist, and denominations printed range from 1 Rupee to 10,000 Rupees, the largest used only for inter-bank transfers. During World War II small-change notes denominated in cents were used, again to alleviate coin shortages caused by the war.

There are great rarities in the Ceylon series issued prior to 1950 (when the Central Bank of Ceylon was established), as well as more affordable notes. Although published in 1939, B.W. Fernando’s book remains an important source, and a 2003 reprint has made it more accessible (though it remains difficult to find in print). With some searching, you can find digital copies online. It makes for an excellent introduction to the coins and paper money of Ceylon. Our Spring 2026 Maastricht Auction features a number of classic Ceylon notes. We are still accepting consignments to the sale, but the deadline is rapidly approaching. If you are interested in consigning to this sale, don’t hesitate to get in touch with Dennis Hengeveld at [email protected] or call 800-458-4646.