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NEW DELHI: More than two years after the Central Bureau of Investigation (CBI) registered a first information report (FIR) in the De La Rue banknote security thread case, the investigation has not progressed beyond the filing of the FIR, with no chargesheet filed and no court proceedings initiated so far, according to a review of publicly available records.
The CBI registered the FIR in January 2023 against former finance secretary Arvind Mayaram, UK-based De La Rue International Ltd. and unknown officials of the Ministry of Finance and the Reserve Bank of India. The case relates to the supply of an exclusive colour shift security thread used as an anti-counterfeiting feature in Indian banknotes. According to the FIR, the Government of India entered into an agreement in 2004 for the supply of the security thread, with the contract valid for a period of five years.
The FIR alleges that De La Rue claimed exclusivity for the technology on the basis of a patent, even though no valid patent existed in India at the time the agreement was signed. The FIR further records that internal assessments by the RBI and the Security Printing and Minting Corporation of India later flagged the absence of patent protection.
The central allegation in the FIR concerns a three-year extension granted in 2013 after the contract had expired on December 31, 2012. The CBI has alleged that the extension was approved without obtaining mandatory security clearance from the Ministry of Home Affairs and without placing the matter before or informing the finance minister, resulting in an undue benefit to the company.
The FIR invokes provisions relating to criminal conspiracy and cheating under the Indian Penal Code, along with sections of the Prevention of Corruption Act for alleged abuse of official position. After the FIR was registered, the CBI conducted searches at Mayaram’s residences in Delhi and Jaipur. Beyond these searches, there is no public record of arrests, filing of a chargesheet, or a court taking cognisance of the case.
The matter is considered significant because it concerns decisions relating to India’s currency security framework. Security threads are a core anti-counterfeiting feature designed to make large-scale replication of banknotes technically difficult. If the allegations in the FIR were to be established, it would indicate serious procedural lapses in the handling of contracts involving sensitive currency security technology. Any weakening of such safeguards can increase the risk of counterfeit currency entering circulation, with wider economic and security implications, including erosion of public trust in cash and potential misuse of counterfeit notes for unlawful activities.
After 2014, the Government of India stopped sourcing currency paper and security features from De La Rue. Official statements made subsequently clarified that the company had supplied currency paper to India only until around 2010 and that its clearance to supply security-related features was extended only up to December 2015, after which no fresh contracts were awarded and mandatory security clearance was not granted.
India currently prints and manufactures its currency entirely through domestic entities. The bulk of banknote printing is carried out by Bharatiya Reserve Bank Note Mudran Private Limited, a wholly owned subsidiary of the Reserve Bank of India with presses at Mysuru and Salboni, along with the Security Printing and Minting Corporation of India Ltd., a government-owned enterprise. Currency paper and security features are sourced through domestic facilities, reflecting a shift towards self-reliance in banknote production and security.
As of now, the FIR filed in January 2023 remains the only formal legal action on record in the De La Rue case, with the investigation yet to translate into a chargesheet or trial proceedings. Response sought from the agency regarding the status of the investigation did not elicit a response.
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