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The Bank of Ceylon was the first private bank to issue banknotes on the island (1844) and Treasury notes were withdrawn in 1856.

The Indian rupee was formally established as the unlimited legal tender 18 June 1869. Thus, the rupee of 100 cents became Ceylon's money of account and sole legal tender effective 1 January 1872, replacing British currency at a rate of 1 rupee = 2 shillings 3 pence. The large, copper 5 cents coin was replaced in 1909 by a much smaller cupro-nickel coin which was square with rounded corners.

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Between 19, a wholesale change in the coinage was carried out.

The Indian rupee was made Ceylon's standard coin on 26 September 1836, and Ceylon reverted to the Indian currency area.

Pound-denominated treasury notes continued to circulate after 1836, along with the rupee.

Production of the cent ceased in 1940, with bronze 1 cent introduced in 1942 with reduced weight and thickness.

Nickel-brass replaced cupro-nickel in the 5 cents in the same year and replaced silver in the 25 and 50 cents in 1943.