According to a CNN IBN report, the incident occurred in 2012 when the security thread to be inserted in the currency paper at the Hoshangabad Security Paper Mill were from an Islamic Nation but the defect in the paper intended for 10 rupee notes were kept a secret by senior officers at the Mill and Security Printing and Minting Corporation of India for over three months and no report was sent to either the Home Ministry or the Finance Ministry.

In a major security breach that could embarrass the previous UPA government, an internal enquiry report has revealed that certain security features were allegedly compromised during the printing of Indian currency, and the lapses were kept under wraps by senior officials working under the Ministry of Finance.

According to a CNN IBN report, the incident occurred in 2012 when the security thread to be inserted in the currency paper at the Hoshangabad Security Paper Mill were from an Islamic Nation but the defect in the paper intended for 10 rupee notes were kept a secret by senior officers at the Mill and Security Printing and Minting Corporation of India for over three months and no report was sent to either the Home Ministry or the Finance Ministry.

"The examination of the 10 rupee notes showed indecipherable text on the security thread, the notes either had Arabic text inscribed on the security thread or did not have any security thread at all. The security thread was also found to be non-magnetic when examined on a quality control device.

The currency paper with defective security thread initially escaped at least four to five quality checks. It was later found that four boxes of sheets had defective currency paper. With 5000 sheets in a box and 50 notes printed on each sheet it amounts to 10 lakh defective notes," the CNN IBN report said.

Even Aristocraft International Ltd, the company, which supplied the defective security thread faced no action. What's worse is that officers allowed the supplier to change the security thread stock without punitive action, the report said.