Are our Currency Notes being printed by Companies earlier Blacklisted for printing Counterfeit Indian & Pakistani Notes?

Are our Currency Notes being printed by Companies earlier Blacklisted for printing Counterfeit Indian & Pakistani Notes?

Why has De la Rue, a black-listed company by the Reserve Bank of India previously, been given the contract to supply machinery for the re-printing currency notes, without any official announcement being made? Until April 2016 at least, De La Rue continued to supply paper for this printing, and was re-issued tenders by the Modi Govt for this highly sensitive activity despite being banned for national security reasons in 2010-2011; Moot question is who supplies the paper for the printing now?

New Currrency

The Reserve Bank of India has, mysteriously, without any public announcement, re-allowed currency notes to be printed at presses with machinery supplied by a previously blacklisted company, De La Rue, banned by India in 2010-2011. While the RBI circular that can be read on its website makes a vague reference to only presses with sophisticated equipment supplied by De La Rue (now renamed KBA Giori), the company’s own website clearly announces interest and role in printing of the currency. Unconfirmed sources from the RBI who requested anonymity told Sabrangindia that after the De La Rue’s alleged involvement in the Panama papers scam, April 2016, this company has been ‘again black-listed’ from supply of paper. There is no official explanation, however of why a foreign company, black-listed on national security concerns (2011) was allowed to supply paper again by the Modi government, without any public announcement between 2014 and 2016. There is also no announcement of this reported recent black-listing on any official government, or the RBI website.

Besides Right to Information (RTI) queries to the Reserve Bank of India (RBI) have been sought on some crucial issues to get these answers. These queries are from activists to the RBI[1]demanding to know whether the paper supplied for the printing of the new notes after de-monetization is paper supplied by De La Rue(UK) and Louisenthal (Germany). These replies assume significance in the wake of the fact that it was on the issue of quality of paper (and security of currency notes) that the 2011 ban had been put into effect in the first place.

Besides, as this article in an investment journal points out, De La Rue could be a major player in prime minister Modi’s Make in India schemes. An announcement claims, “De La Rue is a UK-headquartered banknote manufacturer which has embraced the Indian government’s Make in India clarion call. Here the CEO talks ‘India Investment Journal’ through the company’s journey in India.”

The issue raises serious questions of national security as the black-listed company, de La Rue, before being black-listed –when investigated by the CBI in 2010-2011 was found to involved in dealings of counterfeit currency. Seizures of counterfeit currencies made by the enforcement agencies had revealed that the quality of notes were identical to the legal currency notes and it was difficult for even the banks to identify the differences. Intelligence reports suggest counterfeit currency notes are printed in high-security press in Pakistan and smuggled into India and distributed to destabilize the Indian economy.

Besides national security concerns, sources told Sabrangindia that Italy-based Fabriano Securities, also allegedly named in the Panama off shore companies scam has been the supplier for the security thread for the new currency notes (after de-monetization). The quality of supply of this security thread is in question now with colour running and other complaints coming in of the greeatly-in-demand currency.

National Security Concerns Brushed Of

While concerns of national security have so far been brushed of by officials in the government, what is being ignored is that the Serious Fraud Office (SFO) of the United Kingdom (UK) itself, in 2010 found serious security breaches De La Rue. In their inquiry, the SFO had uncovered that a number of De la Rue employees had deliberately falsified certain paper specification test certificates for some of its 150 clients. Recently it was also revealed in the Panama Papers that De la Rue paid out a 15% commission to a 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.

Why then must India allow such a company with this track record to supply machinery and possibly even print currency notes when the government’s public claim is to rid the market of counterfeit and even those notes that fund terrorism?

The RBI Circular and De La Rue

The Reserve Bank of India(RBI)’s official circular can be read here. “The machinery at Mysore Site has been supplied by M/s. De La Rue Giori, now KBA Giori, Switzerland and that of Salboni by M/s. Komori Corporation, Japan. Both the presses are equipped with sophisticated Security Surveillance Systems.” This contract was given without any public announcement. The fact that this company had not just been officially blacklisted by the RBI in January 2011, but that official evidence  of this black-listing (circulars of the MHA and other government agencies) have vanished from the government website has made this even more sinister.

On December 21, 2011 the then MOS, Finance, Namo Narain Meena had informed the Rajya Sabha the government has banned a British firm supplying currency note papers after it was detected that the company had been providing papers not conforming to the security features agreed upon.
The Times of India had reported that, “in response to a question that De La Rue had contracts with Bharatiya Reserve Bank Note Mudran Private Ltd (BRBNMPL) for supply of bank note papers in India. “However, during July-August, 2010, it came to the notice that the paper being supplied by De La Rue was not conforming to some of the prescribed specifications,” Meena said. The minister said, “The deficiency in the paper was subsequently admitted by De La Rue after which the security clearance was denied to the British firm.”

The newspaper had commented,
“The disclosure raises concern as several recent seizures of counterfeit currencies made by the enforcement agencies had revealed that the quality of notes were identical to the legal currency notes and it was difficult for even the banks to identify the differences. Intelligence reports suggest counterfeit currency notes are printed in high-security press in Pakistan and smuggled into India and distributed to destabilize the Indian economy.

The Indian Express had then reported in 2011 that
“that the country’s principal currency paper supplier, British firm De La Rue, was blacklisted by the government last year with 2000 metric tonnes of its paper lying unused at printing presses and godowns.
The key complaint against De La Rue was that its currency paper failed to meet certain security parameters during testing — both in India and at De La Rue’s laboratory.”

De La Rue’s dubious background and questionable business practices were further exposed in April 2016 by the Indian Express.

The Indian Express had reported on April 7, 2016 that

“The world’s largest commercial banknote maker, De La Rue, had contracted a New Delhi businessman to help it bag tenders in India in return for a 15 per cent commission, besides significant amounts as out-of-pocket expenses towards marketing services, Mossack Fonseca (MF) papers accessed by The Indian Express show.

For More: https://www.sabrangindia.in/article/are-our-currency-notes-being-printed-companies-earlier-blacklisted-printing-counterfeit

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