After the British Invasion of Ceylon in 1795 the Dutch surrendered to British, Trincomalee on 1795 August 26th, Jaffna on 1795 September 27th.
The British under Article 6 of the Capitulation of Colombo, on 1796 February 15th accepted the liability for up to £ 50,000 (i.e. Ryxd 468,750) of Kredit Brief and Kas Nooten still in Circulation and pay interest at 3% per Annum, payable half yearly.
Notes were Endorsed in English with
3 pCent per annum on this Kredit Brief payable by the British
Government of Ceylon under the condition of the Sixth article of the
Capitulation of Columbo. and on back of Kas Nooten
Bearing Interest 3 pCent for Annum
Below a Black rectangular Seal with Arabic text in middle of Signature Geo ⬛ Gregory over Reg? George Gregory was collector for Colombo.
According to Anthony Bertolacci, writing in 1817,
The British commanders agreed, in the capitulation of Colombo, that, provided the amount of the Dutch Company's property in Colombo was such as it had been represented by Governor Van Angelbeek, the new Colonial Government would be answerable for the credit brieven to an extent not exceeding 50,000 sterling; that certificates should be granted to the holders of them, bearing interest at the rate of 3 per cent. per annum, so long as the territory on the south coast of the island, comprehended between Matura and Chilaw, should remain in the possession of the British Crown; but if it were returned to the Dutch, then the debt of the kredit brieven was again to be made over to them. By this means the debt was in a manner funded; and the kredit brieven were no longer a currency. Even had the kredit brieven remained as currency, it is evident, that, in consequence of their interest being fixed at such a low rate as 3 per cent. per annum, while the general rate in India was then from 9 to 12, their value would have been diminished accordingly;From this contemporary account we note that the Kredit Brieven and Kas Nooten were Paper currency notes at time of issue and gave no Interest. They were no longer Currency, but Treasury Bonds after they were endorsed and liability taken over by the British.
The British continued the Dutch Rix Dollar denomination. £ sterling equal to 2.5 Star Pagoda or 8.75 Arcot Rupees or 9.375 Rix Dollars or 112.5 Ceylon fanams or 450 Stivers or 1800 duits(challis).
In 1800 March, Rix Dollar currency notes of the denominations of RD 100, 50, and 25, to the value of RD 30,000, followed by a second issue of RD 45,000, were issued by the British, to gradually redeem the Dutch Kredit Brieven. The notes were exchangeable at the Treasury on demand. Though it bore no interest, the paper commanded a small premium on account of its superior convenience to the copper coins. In October 1801 the estimated note circulation was £ 10,000.
By 1820 paper currency amounted to nearly 2.5 million rix dollars. Several counterfeits came to light and, in order to prevent forgery, Regulation 3 of 1820, requiring the value of the note to be added by means of a "dry stamp". This was not found satisfactory owing to the thinness of the paper and by Regulation 7 of 1820 it was replaced by a stamp in black ink on the back of the note.
By Regulation 5 of 1823 the notes of the value of RD 1 were called in as from 1823 August 31. By Regulation 8 of 1823 all notes of RD 50 and 100 of a date prior to 1823 May 5 were also withdrawn, owing to a theft at the Colombo Kachcheri. Between 1820 and 1825 nearly RD 866,016 in notes had been withdrawn. The note circulation in 1825 amounted to RD 1,561,669. By Regulation 9 of 1827 all rix dollar paper (except RD 2 and RD 5) were withdrawn and on 1830 September 1, the latter too was demonetized.
The holders of Rix Doller paper were allowed the right of exchanging them for bills on London at the rate fixed by the Government.
* Ceylon Coins and Currency By H. W. Codrington. Colombo 1924
Chapter X Dutch - Page 124, 144
* A view of the agricultural, commercial, and financial interests of Ceylon By Anthony Bertolacci, 1817, London 1817 Book I Coins and Currency Page 87.