The remonetisation drive — and the frantic printing of banknotes — has brought some Christmas cheer for some of the world’s largest currency paper suppliers. Over Thursday and Friday, principals of eight foreign firms were in Bengaluru to finalise bids for contracts of 27,500 metric tonnes of paper for lower denomination currency notes to be supplied to India from April-December 2017.
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Company officials who were part of the tendering process at the head office of the Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL) told The Sunday Express that first the technical, and then the financial bids of eight of the nine firms who were invited for the limited tender were examined, and orders finalised. The Letters of Intent along with the precise quantum of orders to each foreign firm would be finalised soon.
The contracts have been finalised for printing currency notes mostly of Rs 10, Rs 20, Rs 50 and Rs 100 denominations, giving a clear signal that the Rs 2,000 and Rs 500 notes would be printed on banknote paper manufactured in India.
Some of the largest companies trading in banknote paper from Germany, Switzerland and Italy figure in the list of successful bidders, but the British banknote giant, De La Rue, was conspicuous by its absence. De La Rue had been supplying huge quantities of currency paper to India for decades, but in 2010-11 lost its security clearance after failing to meet some security parameters. It is understood that the company did not get security clearance from the Ministry of Home Affairs for the current tendering cycle due to the details of commissions that were paid by it to persons named in the Panama Papers, published by The Indian Express in April.
While details of currency paper contracts are not made public, The Sunday Express has learnt that the eight firms that will share the massive contract are Lanquart from Switzerland, Komsco from South Korea, Arjowiggins from France, Crane from Sweden, Goznak from Russia, PT Pura from Indonesia, Fabriano from Italy and Louisenthal from Germany. Representatives of all the firms were present in Bengaluru for the scrutiny of technical and financial bids.
Although the order may not be the largest ever placed by India — paper for higher denominations of currency is now manufactured domestically — company officials say demonetisation, and the urgency to print new banknotes at the four currency presses, have resulted in the rush to place the high-volume order before the Christmas break.
Officials maintain that while some currency paper from foreign firms had to be airfreighted over the past few weeks, no such instructions have been issued to the firms selected for the current bids, and the consignments will be shipped as is done in the normal course.
Significantly, officials of the foreign firms say that the bidding in Bengaluru turned out to be highly competitive, and that the positive response from almost all the companies invited by BRBNMPL resulted in the price of the currency paper being almost 10% lower than the price fixed for the last orders placed in 2015-16.