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Note ban: Cabinet clears Ordinance
Two days before the deadline for depositing old 500 and 1,000-rupee notes expires, the Cabinet on Wednesday approved promulgation of an Ordinance to make possession of a large number of scrapped banknotes a penal offence that will attract monetary fine.
New Delhi: Two days before the deadline for depositing old 500 and 1,000-rupee notes expires, the Cabinet on Wednesday approved promulgation of an Ordinance to make possession of a large number of scrapped banknotes a penal offence that will attract monetary fine.
The Specified Bank Notes Cessation of Liabilities Ordinance makes holding of old 500 and 1,000-rupee notes after March 31 beyond a threshold amount a criminal offence that will attract a monetary fine of Rs 10,000 or five times the cash held, whichever is higher.
Furnishing wrong information while depositing the old currency between January 1 and March 31 will attract a fine of Rs 5,000 or five times the amount.
The Ordinance also provides for amending the Reserve Bank of India (RBI) Act to provide legislative support for extinguishing the demonetised banknotes that are not returned.
While the high-denomination currency ceased to be a legal tender from midnight of November 8, 2016, a mere notification was thought to be not enough to end the central bank's liability and avoiding future litigations.
Currency notes carry RBI's promise to pay the bearer the amount of the value of the note, a pledge that can be nullified only by legislation after giving due opportunity to everyone to return old notes.
Sources said the proposal put to the Cabinet was for a four-year jail term for anyone possessing a number of demonetised currency after March 31, 2017, but it was not immediately clear if it was approved. The Ordinance will have to be sent to the President and after his assent it will come into force.
