Cabinet clears Ordinance, heavy fine for holders of old notes

Breaking News - Two days before the deadline for depositing old 500- and 1,000-rupee notes expires, the Cabinet on Wednesday 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 demonetisation banknotes that are not returned.

While the high-denomination currency ceased to be a legal tender from midnight of November 8, 2016, a mere notification was thought to be not enough to end the central bank's liability and avoiding future litigations.(Read More)

Penalty for old notes? Cabinet to take up Dec 30 cut-off ordinance today

Breaking News - The Union Cabinet is likely on Wednesday to take up an ordinance to extinguish the old Rs 500 and Rs 1,000 notes not returned to banks by Friday, December 30.

Such a move will help bring a much-needed clarity to the centre’s estimates of the demonetisation amount that has come back to the banking system a senior official said. The ordinance will likely specify December 30 as the deadline to deposit the old Rs 500 and Rs 1,000 notes that the government had rendered invalid with Modi’s announcement on November 8.

"It is important to specify December 30 as the deadline as we will count the money till that date that has come back to the banking system for our future calculations,” the official told reporters in New Delhi and added that this would bring more certainty to the Budget calculation for 2017-18.

“If we do not put an end date on the legal character of the old notes, they can be infinitely valid as a legal tender. The government wants certainty on the estimate of the money flowing back. A cut-off date for all deposits will help,” the person said.(Read More)