Late British Colonial Period
1869. It was not until 1869 that the position was regularized and an Order in Council and Proclamation of 18th June revoked previous orders and regulations. The Indian rupee with its silver sub-divisions was formally established as the sole legal tender for unlimited amount. For a copper coinage subsidiary to the silver, a decimal system was adopted and the rupee was valued at 100 cents. Copper coins, expressed in cents of the rupee, were specially struck for the Colony at the British Indian Government Mint, Calcutta, and were released into circulation on the 1st January, 1872.
In 1874, the last link between the old and the modern currency was broken when the old Ceylon coins were demonetized.
1892. From 1872 until 1891, the Ceylon currency combined a binary with a decimal system for coins subordinate to the standard. Proposals were made by the Ceylon Government in 1890 for the demonetization of some of the Indian silver coins and their replacement by a local subsidiary silver currency. It was desired to retain the Indian rupee as the standard of value, but to replace the sub-divisions with a token silver subsidiary currency consisting of 50, 25 and 10 cents of a rupee.
Approval was given to this measure by an Order in Council dated 9th February, 1892, and the new system came into force in Ceylon on the 1st October, 1892. Thus, apart from the Portuguese Indian rupee (demonetized after 19th July, 1893) and the British Indian 1/2 and 1/4 rupee, the coinage of Ceylon after 1892 consisted of:
(a) The silver rupee of British India (100 cents).
(b) Ceylon subsidiary silver tokens for 50, 25 and 10 cents
(c) Ceylon copper coins for 5, 1, l/2 and 1/4 cent.
Due to the fact that in the year 1892 the British Indian mints were precluded from striking silver coins of a fineness standard of less than 916.6 parts in 1000, the Ceylon silver token coinage was originally executed at the Royal Mint, London. From 1892 onwards, the standard of the Ceylon currency remained the same but several interesting changes took place in the denominations.
1909. By an Order in Council dated 18th October, 1909, the Ceylon copper five cents and quarter cent coins were demonetized. The large five cents piece had been found inconvenient and cumbersome and it was decided to replace it with a cupro-nickel coin of the same weight as the new Indian Anna (60 grains troy). To prevent confusion with the Indian coin a square shape with rounded corners was adopted. By a local proclamation dated 13th December, 1909, the new five cents piece was declared a legal tender of Ceylon with effect from the 1st January, 1910. The limit of legal tender was 50 cents and the reverse design was approved by the Master of the Royal Mint and the Commissioners of His Majesty's Treasury. The use of the 1/4 cent as a denomination of Ceylon currency was abandoned.
1919. Following the increase in the price of silver after the Great War (1914-1918), the fineness standard of the Ceylon silver coins was reduced from 800 parts to 550 parts in the 1000. This action was announced by an Order in Council dated 8th May, 1919.
1943. In 1943 the use of silver for the subsidiary token coins was abandoned when nickel brass was introduced.
Other changes in the coinage resulting from the effects of World War II (1939-1945) was the replacement of the copper one cent piece by a bronze coin, lighter in weight. This action was approved in 1942.
1945. A new denomination, a two cents piece in nickel brass, was introduced into circulation in 1945.
Text edited from
* The Coins of the British Commonwealth of Nations
F. Pridmore, London, Spink & Son Ltd., 1960.