Many papers have been written on the fake currency racket. They say the ISI is trying to undermine our economy. But why is the ISI doing it now? Why didn't it do this earlier? Why did the RBI ban notes of certain serial numbers? Can banks themselves distinguish between real and fake currency? Answers to these and other questions might uncover a big crisis.
In the early '90s, Indian currency notes were printed in Madhya Pradesh and Maharashtra. The government decided to add two new presses in Karnataka and West Bengal.
Indian currency notes were always printed on machines supplied by a Swiss firm, Giori. This firm supplies printing presses for 95 per cent of the world's currency. More than 160 nations are its clients.
In 1990, the government laid down minimum conditions for firms wanting to supply machinery for the proposed presses. Of all applicants, only Giori conformed to the government's standards. A committee approved Giori's bid. But the contract was eventually awarded to a Japanese firm, Komori. The dispute between rival...