Cabinet Gives ordinance: 4-year jail, penalty for holding junked notes
By Vamsi Krishna N : 28-Dec-2016
Cabinet today approved the ordinance for imposing penalty including a jail term for anyone holding the old scrapped Rs. 500 and Rs. 1000 notes beyond the cut-off.
The Prime Minister headed Cabinet also has approved another ordinance that modifies the RBI Act to put out the liability of the central bank and government on the scrapped high denomination notes in order to prevent any future litigations popping up.
However, the approved ordinance did not clarify whether the penal provisions prescribed in the ordinance would apply for possessing the scrapped currency high denomination notes of Rs. 500 and Rs. 1000 after the 50 days window to deposit them in banks ends by December 30 or after March 31. The officials clarified that it is unclear as to till which of these two times the option to deposit these scrapped notes in the specified branches of the central bank is open.
According to the new ordinance passed, the person or entity in possession of these two scrapped notes may face penalty in the form of financial fines and also a jail term of up to 4 years, depending on the cases.
Since November 8, after the demonetisation move taken by the government as a measure to curb corruption, black money and terror funding, the holders of the scrapped notes are given the options to either exchange their holdings or to deposit them in their bank accounts at banks. However, later while the option to exchange these old scrapped notes has been withdrawn by the central bank, the holders still have the option to deposit their possession of old scrapped notes in banks, until coming Friday, that is, till December 30.
An official source explained that, “possession of old notes must be made illegal and punishable to ensure that no one is forced to accept scrapped currency as payment or wages.”