There Was A Time When The Indian Rupee Was Used As Currency In The Gulf Countries

Updated on 13 Jul, 2017 at 1:54 pm


India is a country that boasts of a rich history and strong commerce ties way before the British rule. There have been major turns of events throughout the pre- and post independence eras which have given us interesting anecdotes in abundance. One such story tells of how, once upon a time, the Indian rupee ruled the Gulf.

The Gulf rupee issued by the Government of India and the Reserve Bank of India, equivalent to the Indian rupee, was used by countries like Kuwait, Bahrain, Qatar, Muscat, and Oman. The Indian government issued notes in the denomination of 1 rupee, and the Reserve Bank of India issued 5, 10 and 100 rupee notes.


After the British Raj ended, the Indian Government decided to change all the prevalent symbols of British colonization in the Indian currency. However, the Gulf countries and the UAE were allowed to use the Indian rupee as their currency. Therefore, in order to reduce the strain on India’s foreign reserves from gold smuggling, a separate currency was created by the new government.

Kuwait and Bahrain replaced the Gulf rupee with the Kuwaiti dinar and the Bahraini dinar after gaining independence from Britain in 1961 and 1965, respectively. India devalued the rupee on 6 June 1966, therefore, the countries still using it Oman, Qatar, and the Trucial States (which became UAE in 1971), launched their own currencies.


The Gulf rupees were introduced in eight denominations – 10,000, 5,000, 1,000, 100, 10, five, two and one. Though the designs on these notes were similar to those used in India, different colors were used to make the distinction. Red, orange, red and green were the dominating colors. Another distinctive feature of these notes was that they carried a special serial number prefix of ‘Z’ over a number.

The discovery of oil in the Trucial States played a crucial role in changing the status quo of currency model. Some old people in Bahrain still call Dinars “Rupiya” and a few neighboring countries such as Nepal still accept Indian currency.