Penalty and jail term for possessing more than 10 old notes beyond Mar 31

New Delhi: Cabinet on Wednesday cleared promulgation of an ordinance to penalise persons holding junked Rs 500, 1,000 notes beyond March 31.

According to the new rule, Rs 50,000 will be fined for keeping more than 10 old notes beyond March 31.

The ordinance is to extinguish liability of government and Reserve Bank of India on the demonetised high-denomination notes.

Sources said that the ordinance is being brought as it was found to be necessary to prevent future litigations against the government for junking Rs 500 and Rs 1,000 notes.

Official sources said the ordinance has been cleared, but did not say if the penal provisions would apply for holding the junked currency after the 50-day window to deposit them in banks ends as of 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 penalty for holding old currency in excess of 10 notes may also include a jail term of up to 4 years in certain cases.

In 1978, a similar ordinance was issued to end the government’s liability after Rs 1,000, Rs 5,000 and Rs 10,000 notes were demonetised by the Morarji Desai government.

The government had, while announcing the demonetisation of the old currency on November 8, allowed holders to either exchange them or deposit them 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While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.