India

Cabinet clears promulgation of ordinance to penalise holding banned currency

ProMASS: Dec 28, 2016: Cabinet has cleared promulgation of an ordinance to penalise persons holding banned 500 and 1,000 rupee notes. The penalty for holding old currency in excess of 10 notes may include financial fines and a jail term of up to 4 years in certain cases. However, the old notes will be allowed only for the purpose of research and numismatics. The decision was taken at a Cabinet meeting in New Delhi this morning. Sources said the Cabinet also approved an ordinance to amend the RBI Act to remove the liability of the government and the central bank on the demonetised high-denomination notes to prevent future litigations.

However it is not clear as of now whether the penal provisions would apply for holding the junked currency after the 50-day window, which expires this Friday or after March 31st next year.While announcing the demonetisation of the old currency on 8th of last month, the government had 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While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit old notes in their accounts.Our correspondent reports it is necessary to make possession of old notes illegal and punishable to ensure that no one is forced to accept scrapped currency as payment or wages. Besides, the ordinance is also necessary to complete the legal process of demonetisation as banks will stop accepting deposits of old currency after Friday.

Courtesy: AIR NEWS

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