I would personally format the data in the front end tool as you are more likley to have better functions (pre 2012) to handle this, such as the vb/c#/RS, FORMAT function.

As a QUICK fix you change the code to do an ABS on the covert from money to String. Then Use a CASE SIGN(@Amount) WHEN -1 THEN '-' END to add in the negative on the return (see below)

(I also made a change to use SET rather than SELECT out of personal preference)

CREATE function [dbo].[Fn_Indian_Money_Format]

(

@amount MONEY

)

RETURNS VARCHAR(50)

AS

BEGIN

DECLARE @charMoney VARCHAR(50), @RemainingChar VARCHAR(50), @QuoteChar VARCHAR(50)

DECLARE @LenStr INT, @val INT, @index INT

Set @charMoney = CONVERT(VARCHAR(50),ABS(@amount))

Set @QuoteChar = SUBSTRING(@charMoney,1,CHARINDEX('.',@charMoney)-1)

Set @val = LEN(@charMoney) - LEN(@QuoteChar)

Set @RemainingChar = SUBSTRING(@charMoney,CHARINDEX('.',@charMoney),@val)

Set @LenStr = LEN(@QuoteChar)

SET @index = 3

WHILE (@LenStr > @index)

BEGIN

SET @QuoteChar = (SELECT STUFF(@QuoteChar, (@LenStr-@index) + 1, 0, ','))

SET @index = @index + 2

END

RETURN CASE SIGN(@amount) When -1 then '-' END+ isnull(left(@QuoteChar + @RemainingChar, len(@QuoteChar) + len(@RemainingChar)-3),0)

END