The Devendra Fadnavis-led BJP government of Maharashtra recently signed an agreement with British company De La Rue, which has been blacklisted by the Ministry of Home Affairs, and awarded it 10 acres of land in Aurangabad for printing both Indian and foreign currency notes.
Disclosing this to The Quint, Shiv Sena MP Hemant Godse said the agreement was signed six months ago and a 10-acre plot for the proposed plant has been identified at the Maharashtra Industrial Development Corporation (MIDC) complex in Aurangabad. The currency printing plant will cost an estimated Rs 700 crore, Maharashtra government sources said.
This is the first time that a foreign company has been allowed to print currency notes in India. The only other foreign firm involved in the manufacture of products that go into the printing of currency notes is the Swiss SICPA, which has a plant in Sikkim that manufactures specialised, high-security inks for banknotes.
The factory, which “processes the raw material imported from Switzerland”, began operations in 2004 and is said to be “IB (Intelligence Bureau) protected”.
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Godse claimed that when he shared this information with Union Finance Minister Arun Jaitley at a function in Nashik in early December, by which time Prime Minister Narendra Modi’s demonetisation drive was already underway, the latter cautioned him that De La Rue had previously been blacklisted by the Ministry of Home Affairs (MHA).
De La Rue was blacklisted by the MHA in 2011 for two reasons. First, it supplied the same currency printing paper that it sold to India to Pakistan. And secondly, it was found to have supplied defective currency printing paper worth Rs 300 crore. The defect was detected by the Security Printing and Minting Corporation of India Ltd (SPMCIL) following tests.
Fadnavis Govt’s Keenness
But this did not deter the Fadnavis government to scrap the agreement with the blacklisted British firm as it had committed itself to Modi’s ‘Make in India’ programme.
While the Home Ministry has not intervened so far, Godse said that Jaitley had informed him that De La Rue representatives had “tried to meet him several times” since the Modi government assumed power at the Centre in May 2014, but “the finance minister claimed that he had turned down each of the attempts by the firm to seek an appointment with him.”
“De La Rue representatives have told Maharashtra government officials that 90 percent of its printing efforts will be to produce foreign currency, though the company may also print 10 percent of Indian notes at the Aurangabad plant,” Godse said, adding that “De La Rue’s believes that its labour cost will be much lower in India.”
Printing of Indian currency notes cannot be done without express permission from the RBI. Besides, a closed and secretive tender process is followed by the Bharatiya Reserve Bank Note Mudran Pvt Ltd (BRBNMPL). BRBNMPL is a subsidiary of the RBI that runs two banknote presses.
While some quantity of printing paper is manufactured indigenously, the bulk of it is procured from foreign firms such as Crane, Giesecke & Devrient Consortium, Papierfabrik Louisenthal and ArjoWiggins.
Even as the four presses – at Salboni and Mysuru (under the BRBNMPL) and at Dewas and Nashik (SPMCIL) – struggle to print sufficient numbers of Rs 500 notes, banknote industry sources said Letters of Intent have been issued to seven foreign firms for the import of 27,000 tonnes of currency printing paper. The limited tender was kept a closely guarded secret as the price bids were to be opened in the midst of Modi’s controversial demonetisation and remonetisation process.
Among the selected firms are Fedrigoni SpA (which uses the trademark Bariano) of Italy, Lanquart of Switzerland, ArjoWiggins from France, PTPura of Indonesia, Louisenthal of Germany and Crane from Sweden. The paper will be used for printing not only the new Rs 500 but also the Rs 100, Rs 50, Rs 20 and Rs 10 notes. The sources said that delivery, to be done by ships, is expected in March.