Soak cashew nuts in hot water for 15 minutes. Drain the water and grind it to a fine paste with little water.
Heat oil in a pan, add cumin seeds, when it splutters, add finely chopped onions and sauté until onions turn brown. Add a little salt to the onions to speed up the process. Continuous stirring is required for even browning.
Add ginger garlic paste and sauté for a few more minutes until the raw smell goes.
Now add chopped tomatoes, turmeric powder, coriander powder, chili powder and garam masala powder. Cook until tomatoes become mushy.
Once the tomato is cooked, add the capsicum pieces. Let the capsicum get cooked a little.
Then add the paneer cubes and sauté for a few minutes. Let the paneer get mixed well with the masala.
Then add the cashew nut paste and cook for 3-4 minutes. Now add a cup of water and let it boil well. Let the masala and the flavors combine with the paneer well.
Switch off the flame and garnish with finely chopped coriander leaves.