Demonetization: Detailed Drama of How Modi Checkmated Pakistan’s Devastating Assault

All the chairpersons and MDs of India’s top banks were meeting at Reserve Bank of India’s headquarters on the 15th floor of the Mint Street office in a special session that started at 7 pm.  In Delhi, on the other hand, the top Cabinet ministers of the Modi government were meeting over an agenda regarding MoUs between India and Japan.

None of the top bank chiefs or the ministers of the government were aware of what was to happen.

#Demonetization: Detailed Drama of How Modi Checkmated Pakistan's Devastating Assault Click To Tweet

The Cabinet meeting ended at 7.30 pm and the PM went to meet the President to inform him about the plan.  The ministers were instructed to remain in the meeting hall.  The bankers on the other hand, were discussing the situation from the Non-Performing Assets (NPAs) in the economy.

Just before 8 PM, the TV sets were switched on to listen to the PM, with the understanding that the meeting would continue after the PM address.  Of course, the announcement from the PM was going to be earth-shattering for most bankers who had to rush back to their offices to handle the situation arising from the ban of Rs 500 and Rs 1000!

The story of demonitization starts way back in at least 2010 with a company named De La Rue and its role in fake currency in India.  Sometime during 2009-10, the CBI had raided around 70-odd Indian bank branches along the India-Nepal border and found counterfeit currency with them.  That sent shock signals all over the intelligence community.  Upon investigation, however, the intelligence officials found something even more scary!  The branches had received the currency not from some smugglers, but RBI itselfRBI was sending counterfeit notes to the bank branches around the country!

When the CBI raided the RBI, it found the same counterfeit currency in the RBI vaults in Rs 500 and Rs 1000 notes.  The Central Bank of the country had been compromised beyond anyone’s imagination!  The counterfeit and fake currency which Pakistan was pushing into India was being collected and distributed by none other than the Reserve Bank of India!

Almost like real…

In a little known case involving counterfeit currency caught in UP and Bihar, the defending lawyer rather nonchalantly argued that what was the proof that it was fake?  When the currency was sent to the Indian government labs, they indeed confirmed that the currency nabbed from the ISI agents was actually real!  When sent to foreign labs, it was found out that the currency was so close to real that it was extremely difficult to prove it being counterfeit.  In fact, the small difference that helped them prove it was not real was probably inserted on purpose!  Such was the confidence and arrogance of the counterfeiters!

It was found by the CBI on further investigation that the mischief was happening at the end of De La Rue, a company from whom RBI imports 95% of its currency paper.  In fact, RBI’s buy accounts for over 30% of De La Rue’s profits.  At that time, De La Rue was blacklisted by the government and the company came to the point of bankruptcy with 2000 metric tonnes of paper lying unused!  At that time, the De La Rue CEO James Hussey – godson of Queen Mother herself – resigned over what was called “paper quality issues”, which sounded fishy to begin with!

“We don’t know whether the paper disintegrates under a drop of rain or whether there is just a fly in a roll of paper somewhere,” said one source. “The statement is so full of holes that is has created further suspicion.”

De La Rue said the irregularities were of a “serious nature” but that it was “confident that neither the physical security nor the security features incorporated in the paper have been compromised for any customer and that the irregularities referred to relate only to testing of paper specifications at the relevant facility”.

Meanwhile, in 2010 another serious security lapse was exposed!

Outsourcing of Currency Printing by Government: Height of Betrayal

The government, unbeknownst to anyone, had outsourced the printing of currency notes to US, UK and Germany – amounting to Rs 1 lakh crores!!  The entire economic sovereignty of India was at stake!

The RBI had in 1997-98 outsourced printing of 2,000 million pieces of Rs 100 notes and 1,600 million pieces of Rs 500 notes to US, UK and Germany amounting to Rs 1 lakh crore. The committee, after questioning central bank officials, said the reasons provided were far from convincing.

RBI had said the soilage factor and bad condition of notes resulted in the decision. The panel observed that RBI’s system of assessment with respect to demands and supply of bank notes in the country was off the mark resulting in a gap. (source)

The three companies to whom the Indian currency was outsourced were American Banknote Company (USA), Thomas De La Rue (UK) and Giesecke and Devrient Consortium (Germany).

On November 3, 2011 a complaint was received by the Central Vigilance Commission (CVC) signed by “unnamed officers of the Ministry of Finance” – who said that the security was compromised not just by De La Reu, but also other companies – French firm Arjo Wiggins, Crane AB of USA and Louisenthal, Germany!

What is most disturbing is that the information of compromise in security features of the paper for currency had at different times been withheld from the Home and Finance Ministry of India.

Following the quality breach by De La Rue, in September-October 2010, the government tested samples of currency paper supplied by other companies as well. On November 3, 2010, BRBNMPL ( Bharatiya Reserve Bank Note Mudran Private Ltd) — which signs currency note contracts on behalf of the RBI — wrote to the Directorate of Currency, Ministry of Finance, that currency paper supplied by Crane AB of USA and Louisenthal, Germany, had failed tests in Hoshangabad as well but cleared re-tests at the suppliers’ foreign laboratories.

The complaint notes, “BRBNMPL in their letter of 3rd November 2010, concealed the failure of paper supplied by Arjo Wiggins ( a French company) from the Ministry of Finance as detected in the tests conducted on Arjo Wiggins paper at Hoshangabad”.

In 2015, after Modi sought help in investigations in the fake currency notes from the US, it came out that the German company Louisenthal was also selling raw notes to Pakistan, resulting in a ban on the company.

The Home Ministry has barred a German company, Louisenthal, from selling bank note paper to the Reserve Bank of India (RBI) after it discovered that the firm was also selling raw notes to Pakistan, according to a senior official.

“We are only keeping our interests in mind,” the official told The Indian Express. “We have proof that high-quality fake Indian currency notes are being produced in Pakistan and pushed into India through Bangladesh, Nepal, Sri Lanka and Vietnam. The availability of a common supplier could be one of the reasons behind such high-quality fake notes.”

This is how the Indian currency was compromised at every point – RBI, Home Ministry, Finance ministry, and the Indian and Foreign printing presses.  Worse of all, our entire currency production was outsourced to unscrupulous forces who were merrily sharing the real stuff with Pakistan who was happily and arrogantly snubbing us and creating a havoc with our economy!

How Pakistan was Check-mated?

The free flow of Indian currency paper to Pakistan encouraged its government to set up 5 printing presses to print fake currency notes.these were smuggled to Nepal and Bangladesh (often on PIA flights).  The currency entered India via UP and Bihar (Nepal border), via Malda in West Bengal (from Bangladesh), via Rajasthan border, Punjab border and via Chennai and Mangalore through the Indian expats from Gulf.

Routes of Fake Currency to India
Routes of Fake Currency to India (Courtesy IndiaToday)

Pakistan used to pump in money to fund student bodies (like in JNU and Jadhavpur), media and journalists and also political parties to completely influence the elections.

The “Imminent” Assault

Given the aggression with which the Modi government has acted against Pakistan and given its options against Indian – specifically the Surgical Strikes and the heavy bombardment such that Pakistan had to beg India to stop beating them up! – Pakistan wanted another front for a major strike!

As per General GD Bakshi, a prominent security and defense analyst, India has some Rs 16 trillion* of Rs 500 and Rs 1000 in circulation (which is 96% of the entire money supply).  Pakistan was already printing Rs 15 trillion (Rs 500 / Rs 1000) with a view to push them in India to completely “unhinge” the Indian economy in what Gen Bakshi calls an “Economic Pearl Harbour”!

This would have led to unprecedented terror strikes and runaway inflation and steep price rise, which would have spelt doom for India in many ways.

On the night of Nov 8th, when the Cabinet Ministers and the top bankers were caught unawares by the announcement of the Indian PM Modi on the ban on the notes – an act in extreme secrecy; all efforts to save Pakistan and its network were thwarted.

Pakistan was checkmated.

All those whom you see now coming together to fight demonetization know exactly what was being planned and what led to all this.  If they still choose to fight this act by the Modi government, you should know exactly from which team they are fighting this existential war of India’s future!  And, with the context of how RBI, Home and Finance Ministry, and banks were compromised over the years, one can very well understand the reason for extreme secrecy and quick action – which the critics ironically call “knee jerk” and “unprepared government plan”.

* Gen GD Bakshi mentions another figure of the number of notes.  The credible figure of currency in circulation is the one mentioned here with the link


Important information related to the FICN (Fake Indian Currency Notes) issue

Let us also look at other information which is important to fully understand the situation around the currency notes circulation by Pakistan.

Changes in De La Rue and Printing notes in India

There are only so many companies in the world with the expertise to produce the currency paper.  De La Rue, since its rather ignominious episode with the Indian currency and being close to bankruptcy has undertaken a complete rehaul of the company.  And with a new management, it has and is helping India to create production plants in India.

The printing facility in Mysuru (of Bhartiya Reserve Bank Note Mudran Private Ltd (BRBNMPL) was set up with De La Rue Giori (now KBA Giori, Switzerland).  Now another facility is coming up at Salboni with help from Komori Corporation, Japan.  It is important to know that indigenous note mills in India will be able to take care of 70% of the domestic currency needs.

new currency notes

This is where the Rs 2000 notes will also be printed.  In an attempt to participate in “Make in India”, the erstwhile De La Rue is working with the Indian government to establish the mills here in India.

So De La Rue is keen to contribute to the PM’s initiative, by bringing investment, expertise, knowledge and best practice to currency production in India. Given the opportunity to partner with India, we hope to create a regional hub for research and development, as well as local manufacturing facilities for the supply of security features for the next generation of India’s banknotes, passports and identity documents.

We need to make sure that ultimately India is able to work through the technology with more reliable partners and eventually on our own to have our important paper needs taken care of – currency, Aadhar and passport.





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  1. Physdude says

    16,000 trillion notes would amount to roughly Rs. 1000 crore for every person in India which is utterly absurd. A moment’s thought will also show that 16,000 trillion notes is way beyond the world’s printing capacity, leave alone Pakistan’s.

    To me, this suggests a weak post hoc justification of an absurd policy since the black money excuse is being exposed for the nonsense that it is.

    1. Desh Kapoor says

      Well that is a rather stupid argument. I had quoted Gen GD Bakshi. I checked the numbers on my own later and found that it should have been Rs 16 trillion instead. Anywho, it doesn’t take away the seriousness of the situation! Anyone who may have followed the whole path of news items for last 4-5 years and how the investigations into FICN were going on and how Pakistan was using it.. one wouldn’t be as cavalier as you are in your reductionist argument! Actually, it is for people like you – with 2 ounce of info and 100 pounds of reductionist logic and tons of masochism – that I have written what I have in the last para.

      1. Sid says

        He must have been misquoted as saying 16000 trillion instead of 16000 billions, which is 16 trillions. And cool down, you are going to be ridiculed by many, because lot of people are upset since they too lost money that was safe during Congress’s misrule. Corruption brings all suckers together… ?

      2. Emily says

        Your article has about a milligram of journalistic integrity and 100 tons of pure unadulterated bovine excrement masked in curry sauce.

        1. Desh Kapoor says

          ROFL.. nice try.. 🙂

      3. Nitish says

        15 Trillion Rs / 750 Rs = 20 Billion Notes (200000 Lac Notes)
        Capacity of 1 USA Fed Printing Press = Roughly 25 Lac a day
        Time it takes to print 200000 Lac Notes in 1 Press = Roughly 22 years.
        To give you a perspective India has 1 Note printing facility which is smaller than a US Fed one.
        Your article is saying Pakistan has planned this since at least 22 years back and has more and bigger printing presses than the USA and also the money to obtain such amount of paper, dye and labor. Yeah right.

        1. Desh Kapoor says

          Pakistan has not one but 5 printing presses printing FICN in normal circumstances. And India has not one but two presses as of now.

  2. jaiparkash says

    the biggest problem is that we r still importing the papers n may be even notes from the same source which was banned earlier. in fact that is the only source which manufacture currency printing paper n he is no more a trust worthy vendor, the famous De La Rue

    1. Desh Kapoor says

      Well, there is no way out of importing paper. But the Modi government is working with different companies to have indigenous production facilities. We will get there but it will take time.

  3. jayaraj says

    Eye opener. Loved reading it.

    1. Desh Kapoor says

      Thanks so much! 🙂

  4. Wilson says


    1. Desh Kapoor says

      Sure. No wonder you are shouting and frothing so much. Stop whining and start paying your taxes …and get your black money out you moron!! LOL!

      1. Wilson 2 says

        And how in the whole wide world do you get such information maintained at high secrecy? Bakwas kathe ho to bhi style se karthe ho…

        1. Desh Kapoor says

          Dude- it was all OVER the papers – look at the links! Do yourself a favor – make sure you read your newspapers and keep abreast of things before you make a fool of yourself. The whole situation has been a mess for so long… and it was only a matter of time before Pakistan would raise the stakes. And, one more thing – what was the complete extent of the danger can only be calculated by people on their own, because something had to be something awfully serious for Modi to put his future elections on the line by taking a step which had potential to be SO unpopular! It takes guts and thank god someone has it. Unlike cowardly, ill-formed, juvenile morons like you.

        2. Anonymous says

          Yes man anything beyond your intelligence is nothing for you.
          Did you ever touched Moon, Sun or anything which is your beyond and still you are believing it you moron?

    2. Emily says

      Maybe Desh Kapoor is a unpaid shill for Mr. Narendra Modi .

      He is responding to every critical comment of his fiction masquerading as journalism flaming them for finding the fishnet size holes in his severely flawed conspiracy theory article. Says a lot…

      1. Desh Kapoor says

        Maybe you are a paid troll of Sonia and Mamata. Who knows… right?

  5. Maan says

    nicely put. Thank you for posting it

    1. Desh Kapoor says

      Thanks sir!

  6. Arun says

    Informative..thanks for writing.

    One typo — did you mean “intelligent community” or “intelligence community”?

    1. Desh Kapoor says

      you are right sir.. thanks for catching it! I have corrected it now.

      1. Indian@heart says

        ‘erstwhole’ is another typo, towards the end. Great article.

        1. Desh Kapoor says

          Thanks so much, Indian#heart, I greatly appreciate you pointing that out! I usually write my articles in one go and sometimes typos creep in unbeknownst. Thanks again! 🙂

  7. Sai says

    Nice article. I appreciate your efforts. Loved reading it. Now a days, we need honest writers like you.

    1. Desh Kapoor says

      Thank you Sai!

    2. Emily says

      You cannot be serious !!! You call this balderdash as ‘honest writing’?

      There is a ton of fake news creators in Macedonia and Russia catering to your needs.

      1. Desh Kapoor says

        LOL.. the person who cant even speak with his/her/it ‘s own name is calling something WITH links and references as fake. Really?!!

  8. Ramesh Boga says

    That was an Eye opening article for real Indian’s [who are by heart not by note 😉 ].
    With this decision 2 things are highly impacted and every one can see and feel it. one is Black money and the other one is attacks in Kashmir and the are very well favor to common Indian people.
    In 70 years of Indian Independence 1st time we see the maximum people support to Indian PM.
    Looking at this article it very clear that the information which you have mentioned was very realistic and convincing and no doubt, but it might looks bitter for anti nationalist and corrupted people.

    Thank you very much Desh Kapoor for this article

  9. Emily says

    This alleged drama is a fine cock and bull story.

    And the fact that none of this is reported in mainstream Indian media and here is a crackpot explaining away Modi’s bunny brained scheme from his Jamesbond files….

    Fake News at its finest. Desh Kapoor gets his information from the Joyluck Club of New Delhi and Desperate Housewives of Mumbai.

    I challenge the author to post links to any credible source for this tall tale ( he already claims it was all over in news so lets see them)

    The fact that he is responding to every comment here and flaming people for his Mickey Mouse theory says a lot about the veracity of this article…errr FICTION !!!

    Leave the journalism to the real journalists and stop spreading fake news.

    1. Desh Kapoor says

      “I challenge the author to post links to any credible source for this tall tale” – the entire article has details which have links to national papers and sites. If you are only focused on one piece of information from Gen GD Bakshi – then let me tell you clearly that its details do NOT matter as much as its overall import does. Given the severity and extent of action by Modi, an extremely shrewd and smart politician, it is easily clear to anyone WITH the past context that it had to be something really serious to warrant such an action. As for reporting the secret threats which the country maybe facing – no mainstream media will share that because no one will speak about it officially. Gen Bakshi has enough connections to give a very high level blurb on it. Like I said his details do NOT matter in the overall scheme. In fact, even if I were to take his piece of information out, it is ANYWAY a very damning situation which SHOULD have been dealt with by Chidambaram and MMS LOOOOOONG BACK!! So go get a life you fake-handle moron. WHen you have the freaking courage to use your name and a REAL email, then come and give homilies on honesty. Until then you can suck upto Sonia… OK?

      1. Emily says

        All your ad hominem attacks aside… you do admit to cooking up a conspiracy theory based on random articles from newspapers and your wild imagination that rivals that of some of the finest fictional authors.

        My interest in this article is purely journalistic integrity (of which you seem to have none) and I have no skin in the game or interest and emotional stake in Indian politics. I stumbled upon this article by accident and decided to further investigate the source and veracity.

        As I suspected, you are a crackpot conspiracy theorist and possibly a unabashed apologist for Mr Modi who parades around draped in saffron garb. I just wanted to confirm my suspicion that this was written by a journalistic wannabe crackpot and sure enough you confirmed my suspicions.

        It is sad and pathetic that you chose to defend your crackpot article criticisms with ad hominem attacks to every critical comment.

        You are a malicious false news generator and nothing more. Have a nice day !!

  10. T.E.Rajendran says

    India as well must invest in technology in manufacturing currency notes of high quality, comparable to Australia or New Zealand and upgrade printing technology locally that the entire requirement of currency notes are sourced within the country. This is possible with the high technology currently available with in India.
    High denomination notes should be demonetised periodically to ensure hoarding in black money and counterfeit printing are fully discouraged.

    1. Desh Kapoor says

      Totally agree with you sir!

  11. thegreeneyeddoc says

    Informative and nicely written. And omg! 3 cheers for the champion of ‘responsible’ journalism: Emily! Bravo!!
    Dear Emily, his author here says he’s researched so much. Did you at least check his references before slamming? If you think you sound like Goswami or something fighting like that; well, you don’t. Just know that sometimes the truth can be so bizarre, that you might find it hard to believe.

  12. Raman Reddy says

    Truth often speaks through lonely journalists like you. Mainstream media is often too politically correct for fear of becoming unpopular. Hats off for the article! The links provided by you make the article credible and believable.

    1. Desh Kapoor says

      Thanks so much sir, for your kind words!

  13. Jayant says

    Kudos for magnanimous effort. Even more interesting was reading the opinions of those whose intestines have been twisted beyond capacity to repair by any medical practitioner. They all have either placed damn-black stripe on good eyes or heavily paid in all fake currencies to oppose whatever any body other than Congress/Aap/SP/LEFT leaders can do.
    The quantum of fake currency – now lying as a big burden to dispose off with Pakistan, may be less than imagination or even more, but fact remains that it was not just a blow but a big thud to push them behind many years with economy in swear.

  14. H.S.Subbaramaiah says

    This Article is projecting that Pakistan put a scare of counterfeit currency into the Indian politics and our Beloved Prime Minister yielded to it by demonetising 96 % of currency under circulation getting terrorised by this scare. Where as De La Rue company which was under Bankruptacy got a new assignment of printing new currency for Indian Money market. This is the biggest scam of the Era. Thereby the Indian 1.35 billion people were put under hardship and kayos.

  15. H.S.Subbaramaiah says

    Further to my previous comment at No.39, we all know the lose of money to Indian exchequer to be calculated which involves cost printing and handling of 96% of Indian currency which was demonetised, wages paid to the staff of Banks all over India and also other staff who had to the additional work because of this demonetisation and cost of printing new currency to replace the demonetised currencies and transporting it to nook and corner of our country. Next how the counterfeit notes supposed to have went into the vaults of Reserve Bank of India as mentioned by the author of this article? If what is written in this article is true that the counterfeit notes were passed through Reserve Bank of India itself then how a common citizens of India could have verified the genuineness of these notes? That may be the fate of staff who are taking the deposits from the public since last 33 days!! How our Beloved P.M. and F.M. are getting the clear picture of actual total money returned to Bank vaults all over our country in the last 33 days? That means the new currency is going to replace the counterfeit notes which might have been deposited in the banks since last 33 days!! which deflate the situation adding to the other kayos already facing our nation.

  16. H.S.Subbaramaiah says

    Suddenly I remembered an Hollywood film by name Fear is the key by reading this “How Modi Checkmated Pakistan’s devas ting Assault”. Just a scandal let loose inside Indian monetary system that Pakisthan has printed 16 trillion counterfeit notes to circulated in India was enough to terrorise our beloved Prime Minister to call for an urgent meeting of all bank chiefs and cabinet of ministers run out to President of India to inform him about his counter action and declare through media at late hour of 8th October saying the Indian currencies of Rs.500 and 1000 lost it’s leagal tender to the nation. Was it a Checkmate or in other words yielding to the terror created by Pakisthan and putting the entire population of our nation on the run to Bank to surrender the demonetised currencies and undergo kayos and difficulties resulting in 111 deaths of Indian citizens.

  17. H.S.Subbaramaiah says

    The Author of this article in conclusion para mentions that “In an attempt to participate in “Make in India”, the erstwhile De La Rue is working with the Indian government to establish the mills here in India.” by which it looks that the entire drama of demonetisation of 96% of Indian currency is only to make true and make it possible the our beloved Prime Minister slogan “MAKE IN INDIA” come true at the cost of kayos suffered by the 1.35 billion population.

    Whatever it is, I am happy the Income Tax Officials have now found to unearth bulk of black money all over the nation consisting in the shape of newly printed currencies by raiding firms and individuals who are trying to transport money in bulk.

    1. Desh Kapoor says

      “entire drama of demonetisation of 96% of Indian currency is only to make true and make it possible the our beloved Prime Minister slogan “MAKE IN INDIA””

      A fool will find a way to show his foolishness no matter what. The sambhar you eat gives you some calcium. I am sure you are eating your sambhar because your bones are breaking. Right?

  18. H.S.Subbaramaiah says

    The Author of this article in conclusion para mentions that “In an attempt to participate in “Make in India”, the erstwhile De La Rue is working with the Indian government to establish the mills here in India.” by which it looks that the entire drama of demonetisation of 96% of Indian currency is only to make true and make it possible the our beloved Prime Minister slogan “MAKE IN INDIA” come true at the cost of kayos suffered by the 1.35 billion population.

    Whatever it is, I am happy the Income Tax Officials have now found to unearth bulk of black money all over the nation consisting in the shape of newly printed currencies by raiding firms and individuals who are trying to transport money in bulk.

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