Demonetisation ordinance passed: Holding old notes a criminal offence post 31 March
The ordinance is being brought as it was found to be necessary to prevent future litigations against the government for junking Rs 500 and Rs 1,000 notes
The Cabinet today cleared promulgation of an ordinance to penalise persons holding demonetised Rs 500 and Rs 1,000 notes after 31 March, when the deadline to deposit these notes at the RBI window ends.
As per the ordinance named the Specified Bank Notes Cessation of Liabilities Ordinance, holding these notes after 31 March deadline would be a criminal offence, say some of the media reports.
The Cabinet today approved promulgation of an ordinance to impose a penalty, including a jail term, for possession of the scrapped 500 and 1,000 rupee notes beyond a cut-off.
The Cabinet headed by Prime Minister Narendra Modi also approved an ordinance to amend the RBI Act to extinguish the liability of the government and the central bank on the demonetised high-denomination notes to prevent future litigations.
Government approves ordinance on deadline to deposit old notes: Sources
— ANI (@ANI_news) December 28, 2016
Name of the Ordinance is 'The Specified Bank Notes Cessation of Liabilities Ordinance' : Sources — ANI (@ANI_news) December 28, 2016
According to government sources cited by CNBC-TV18, those who hold old notes after 31 March is likely to face 4-year jail term and also those who transact in old notes is likely to face a penalty of Rs 5,000.
However, a PTI report said the official sources did not say if the penal provisions would apply for holding the junked currency after the 50-day window to deposit them in banks ends as of 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 will extinguish the liability of the government and RBI towards the promise to pay the bearer of these notes their value because of a statutory requirement.
In 1978 a similar ordinance was issued to end the government's liability after Rs 1,000, Rs 5,000 and Rs 10,000 notes were demonetised by the Janata Party government under Morarji Desai.
A PTI report citing sources in the government said the ordinance is being brought as it was found to be necessary to prevent future litigations against the government for junking Rs 500 and Rs 1,000 notes.
Seeking to prevent harassment and any ambiguity, a proviso would be added to ensure that certain category of people can still deposit the old notes in RBI branches between 31 December and 31 March next, said the report.
The government had, while announcing the demonetisation of the old currency on 8 November, allowed holders to either exchange them or deposit in bank and post office accounts.
While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.
Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply
"The steep downward revision of Q3 FY16 has in turn led to higher growth in Q3 FY17, thus masking the impact of demonetisation in the Q3 figures," the economic research department of country's largest lender SBI said in a note.
The speech is likely to take stock of the economic situation after the demonetisation
As the new Rs 2,000 notes began flowing into the market at some point on Thursday, some decided to mark the occasion with a selfie