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Heat the oil in a large nonstick pan over medium-high heat. Dip the paneer into the batter and then carefully add to the hot oil, using tongs. Fry on each side for about 2 to 3 minutes until golden brown.
Serve with chutney.
Remove the paneer from the cheesecloth, and use the paneer immediately, or refrigerate in a covered container for up to 5 days.