Govt plans heavy fine on possession of banned notes above value of Rs 10,000

New Delhi: The Modi government is planning to bring in an ordinance by which possessing, transferring or receiving an amount over Rs 10,000 in banned Rs 500 and Rs 1000 notes after December 30 will be punishable by law.

According to a report in NDTV, the maximum number of banned notes one can possess subsequently will be 10.

The ordinance has to be issued before December 30, said the report.

The penal provisions, which are yet to be finalised, will involve a fine of a minimum Rs 50,000 or 5 times the amount in question, whichever is higher.

A municipal magistrate will hear cases involving violation and decide on penalty, said the report.

The ordinance includes recommendations made by the Central board of directors of the Reserve Bank of India (RBI). Demonetised currency has to be deposited directly into the Reserve Bank after December 30, and a grace period for the same will be specified later.

On December 13, the Reserve Bank said around Rs. 12.44 lakh crore - 80 per cent of the 15.44 lakh crores that were circulating in 500 and 1,000 rupee notes when Prime Minister Narendra Modi announced the ban - had been submitted.

The RBI had earlier this month issued an order stating that an amount exceeding Rs 5000 in demonetised notes cannot be deposited into bank more than once till December 30. Following outrage, the order was withdrawn.

PM Modi announced demonetisation of Rs 500 and Rs 1000 notes on November 8. Subsequently, there has been significant cash crunch at banks and ATMs, even though the government stated that 80 per cent of ATMs had been recalibrated with new notes of Rs 500 and Rs 2000. Also, several thousand crores in old and new currency have been seized across the country.

There is also a weekly withdrawal limit of Rs 24,000 from banks and Rs 2500 per day from ATMs. However, bankers have opined that the curbs may continue after December 30.