Modi Cabinet approves ordinance to penalise people holding junked Rs 500, Rs 1,000 notes | Top Highlights

The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday promulgation of an ordinance to penalise persons holding junked Rs 500, 1,000 notes.

Here are important highlights of the ordinance approved by the Union Cabinet on Wednesday- 

1. Promulgation of the ordinance approved to impose a penalty, including a jail term, for possession of the scrapped 500 and 1,000 rupee notes beyond a cut-off.

2. The Cabinet also approved an ordinance to amend the RBI Act to extinguish the liability of the government and the central bank on the demonetised high-denomination notes to prevent future litigations.

3. 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.

4. The penalty for holding old currency in excess of 10 notes may include financial fines and a jail term of up to 4 years in certain cases.

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 While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts. 

6. The name of the Ordinance is 'The Specified Bank Notes Cessation of Liabilities Ordinance'.