The first “rupee” is believed to have been introduced by Sher Shah Suri (1486-1545), based on a ration of 40 copper pieces (paisa) per rupee.
The word rupiya is derived from word rupa, which means “wrought silver, a coin of silver”, in origin an adjective meaning “shapely”, with a more specific meaning of “stamped, impressed,” whence “coin”.
It is derived from the noun rupa “shape, likeness, image”. Arthashastra, written by Chanakya, prime minister to the first Maurya emperor Chandragupta Maurya (c. 340-290 BCE), mentions silver coins asrupyarupa, other types of coins including gold coins (Suvarnarupa) and lead coins (Sisarupa) are also mentioned. Rupa means form or shape, example, Rupyarupa, Rupya – wrought silver, rupa – form.
During his five year rule from 1540 to 1546, he set up a new civic and military administration; Sher Shah Suri issued a coin of silver, weighing 178grains, which was termed the Rupiya.
During the British rule in India, and the first decade of independence, the rupee was subdivided into 16 annas. Each anna was subdivided into either 4 paisas, or 12 pies. So One rupee was equal to 16 Annas, 64 Paises of 192 Pies.