RBI has selected the previously blacklisted company De La Rue as one of the companies to supply the new Rs 500 and Rs 2000 notes. Interestingly, De La Rue was banned by the Indian government from supplying to RBI because it was detected that the company had been providing papers not conforming to the security features agreed upon and also supplying paper to Pakistan that is the point of origin for most fake notes in India. Yesterday the Indian army found Rs 2000 notes on two terrorists. GoaChronicle.com investigates…
On November 8, Prime Minister Narendra Modi, while announcing the move to scrap old high currency tender, said counterfeit notes are being used to fund terrorist activities in the country.
The Army yesterday recovered Rs 2,000 notes, which has been in circulation for less than a fortnight, from two terrorists killed in Bandipora district of Jammu and Kashmir. It is not yet clear whether the notes recovered from terrorists are fake or genuine.
In 2009-10 the Central Bureau of Investigations (CBI) raided some 70-odd branches of various banks on the India-Nepal border from where counterfeit currency racket was unearthed. The officials of these branches told CBI that they had got these notes from RBI which led CBI to raid the vaults of RBI. What CBI found in the vaults of RBI were huge cache of counterfeit Indian currency lying in the denomination of 500 and 1000, the same counterfeit currency smuggled by the Pakistani intelligence agency ISI into India.
In 2010, the Parliamentary Committee on Public Undertakings (COPU) expressed serious concern over outsourcing of printing of Indian currency notes amounting to Rs 1 lakh crore (Rs 1 trillion) to three countries in 1997-98 and said that such a tendency would put India’s economic sovereignty at stake.
Pulling up the Reserve Bank of India and the Union finance ministry for outsourcing of currency notes, the COPU said it was ‘aghast’ at the move and described it as ‘an unprecedented, unconventional and uncalled for measure’.
“The committee was informed that 2 billion pieces of Rs 100 denomination and 1.6 billion pieces of Rs 500 denomination of notes were outsourced for printing,” the then COPU chairman V Kishore Chandra Deo had said.
The committee submitted its report in the Lok Sabha. The printing contracts were given to American Banknote Company (USA) – 635 million pieces; Thomas De La Rue, UK — 1.365 billion pieces (Rs 100 denomination) and Giesecke & Devrient Consortium (Germany) — 1.6 billion pieces (Rs 500 denomination), amounting to a sum of Rs 100,000 crore.
There were news reports in January 2011 that the Indian Government had broken its relationship with the De La Rue Company. The Government gave the contract of printing 16,000 tons of currency paper to 4 competitors of the De La Rue Company. The RBI did not even invite the De La Rue Company to take part in this tender.
Recently it was also revealed in the Panama Papers that De la Rue paid out a 15% commission to one New Delhi businessmen to secure contracts from Reserve Bank of India. There are also reports that De la Rue paid £40m in settlement to the RBI for issues in production of paper notes.
Accessing media reports and through sources in the Indian government, GoaChronicle.com has also learned that De La Rue has been given clearance and there are even plans in discussion with the company for setting up of a security paper mill and a research and development centre of identity software in Madhya Pradesh.
In April 2016, Bharatiya Reserve Bank Note Mudra Private Limited, a wholly owned subsidiary of the RBI, that prints notes has selected four entities – UK-based De La Rue, Australia’s Innovia, Munich-based Giesecke & Devrient and Swiss company Landquart – to supply three kinds of plastic notes.
The question that arises now with the discovery of the Rs 2000 notes on terrorists yesterday in Kashmir is whether the plan of the Prime Minister of India Narendra Modi to control counterfeit monies in the country can be curbed with a formerly blacklisted company De La Rue being one of the suppliers of the plastic notes would be successful or not.