Holders of demonetised Rs 500, Rs 1,000 notes will be penalised

Updated: Dec 29, 2016, 13:54 IST | Agencies |

The Cabinet has cleared an ordinance that will make holding these notes after March 31 a criminal offence attracting a fine of Rs 10,000 or five times the cash held

New Delhi: Two days before the deadline for depositing old 500 and 1,000 rupee notes expires, the Cabinet yesterday 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 1,000 and 500 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.

Official sources said the Cabinet headed by Prime Minister Narendra Modi approved the Ordinance, but did not say if the penal provisions will apply to holding the junked currency after the 50-day window to deposit them at banks ends on December 30 or after March 31, till which time deposit of old currency notes at specified branches of the Reserve Bank after submitting a declaration form is open.

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. 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 will come into force.

‘Backdoor method’
“It was inevitable for the government to bring the ordinance or else demonetisation move would not be legal...in actual practice, they should have amended the law concerned when Parliament was in session (to validate the December 30 deadline),” CPI(M) general secretary Sitaram Yechury said.

“There is no need for taking ordinance route. But, afraid of law like this facing Parliament during winter session, the backdoor method has been employed by the Modi government,” he added.

However, West Bengal Chief Minister Mamata Banerjee declined to say anything on the ordinance. “Let me first go through the ordinance. I have to see the language. Without seeing it, it is difficult to say anything at this stage,” Banerjee told reporters.

Rs 5k
The fine for furnishing wrong information while depositing the old currency between January 1 and March 31; it may also be five times the amount

4 yrs
The proposed jail-term for anyone possessing a number of demonetised currency after March 31, 2017

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