Demonetisation bill introduced in Lok Sabha to make holding of scrapped notes punishable

New Delhi: Government on Friday introduced in Lok Sabha a bill that provides for holding, transferring and receiving of old Rs 500 and Rs 1,000 currency notes a criminal offence, punishable with a minimum fine of Rs 10,000.

The Specified Bank Notes (Cessation of Liabilities) Bill, which seeks to end the liability of RBI and the government on the currency notes demonetised in November last, was introduced by Finance Minister Arun Jaitley amid stiff opposition by Trinamool Congress, which called it "illegal" and "anti-national".

Representational image. PTI

Representational image. PTI

Once passed by Parliament, the bill will replace an ordinance promulgated on 30 December last which provides for a fine of Rs 10,000 or five times the cash held, whichever is higher, on holding of more than 10 banned Rs 1,000 and Rs 500 notes.

The bill states that the government took the demonetisation decision on the recommendations of the RBI's central board to eliminate unaccounted money and fake currency notes from the financial system.

Apart from aiming at ceasing the liability on old notes, the bill also provides that an Indian citizen, who was outside the country between 9 November and 30 December, will be entitled to tender the demonetised noted within the grace period under rules provided by the RBI.

It also prohibits the holding, transferring or receiving of these notes from 31 December, 2016.

It also seeks to impose penalty for contravention of the ordinance, which it will replace, and to confer power upon the court of a first class Magistrate to impose penalty.

The ordinance provided for amending the Reserve Bank of India (RBI) Act, 1934 to provide legislative support for extinguishing the central bank and government's liability on the demonetised banknotes that are not returned.

"The main objectives of the ordinance are to provide clarity and finality to the liability of the RBI and the Government of India for the specified bank notes (of 1,000 and 500); to provide an opportunity to those persons who were unable to deposit the SBNs within the time provided; and to declare holding, transferring or receiving SBNs as illegal, with provisions for penalty for contravention of any of the provisions of the Ordinance," it said.

Those keeping the junked notes for "study, research or numismatics" purposes would be exempt from penalty provided they hold not more than 25 number of such notes irrespective of the denomination.


Updated Date: Feb 03, 2017 16:52 PM

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