Fresh Update: No Jail Term For Holding Old Notes Post 30 December

Transactions in old notes could attract a fine of up to Rs 5,000.

An Indian shopkeeper counts notes at his shop. (Photo: Reuters)

A day after the Cabinet approved an ordinance to impose penalties on anyone possessing demonetised Rs 500 and Rs 1,000 notes beyond the 30 December deadline, officials on Thursday said that there won’t be any jail term for anyone holding the old notes.

The ordinance, ‘The Specified Bank Notes Cessation of Liabilities Ordinance’, will go to the President shortly and will be effective from 31 December, a day after the deadline to deposit old notes in banks expires.

Also Read: All the Notifications, Clarifications, Changes Since Note Ban

Scrapped notes can still be deposited at select RBI branches till 31 March, 2017, after submitting a declaration form, but it will only be for exigencies. Furnishing wrong information while making the deposit will attract a fine of Rs 5,000 or five times the amount.

There could be a cap on holding no more than 10 notes of the scrapped Rs 500 and Rs 1,000 notes each after 30 December, and will attract a fine of Rs 50,000.

According to CNN-News18, transactions using old notes could draw a fine of up to Rs 5,000.

Holders of old currency notes have an option to deposit them with the RBI by 31 March, but even this period may be curtailed, they said.

On 8 November, Prime Minister Narendra Modi had announced demonetisation of Rs 500 and Rs 1,000 currency notes – which formed over 80 percent of the currency circulating in the country at the time.

All the currency, which was in circulation when the surprise announcement was made, has not been returned to the Reserve Bank of India (RBI).

The new currency notes, meanwhile, are hard to come by given the slow printing and massive population it needs to reach.

Also Read: Note Ban Has Stained Modi’s Reputation, Writes Shashi Tharoor

To ensure complete prohibition of the demonetised notes, the government had wished to amend the Reserve Bank of India Act. However, the washed-out winter session of Parliament could not conclude any business. This possibly led the Centre to opt for the ordinance route to introduce the penalty.

(With inputs from PTI, Indian Express and The Economic Times)