Cut paneer into small square cubes and deep fry until golden brown.
Let the paneer cubes soak in warm water for a while to make it further soft.
3)Grind all the ingredients given under coriander paste into a thin paste in a mixer grinder(coriander leaves, green chillies and fennel seeds).
Heat 4 tbsp oil in a kadai. Add chopped onions and fry till golden brown.
Now add the prepared coriander paste and cook for 2-3 minutes on medium flame.
7)Add red chilly powder, garam masala powder, coriander powder and salt.
8)Then, add the cashew paste. Mix well. Keep scraping sides if the masala sticks to the sides/bottom of the kadai. Stir continuously till oil accumulates on top.
9)Add 1/2 cup of water. Boil and stir occasionally.
10)Now add 1/2 cup milk and mix well. Then, add paneer cubes, stirring continuously on low heat for 5 minutes.
11)Garnish with chopped coriander leaves. Serve hot with chappathi or naan.