Govt. approves ordinance on deadline to deposit old notes

The government cleared on Wednesday an ordinance on deadline to deposit scrapped high-value currency notes.

Name of the ordinance is 'The Specified Bank Notes Cessation of Liabilities Ordinance', according to sources.

This ordinance makes possesing huge amount of scraped Rs. 1,000 and Rs. 500 notes a criminal offence, thereby attract a jail term and a monetary penalty of five times the amount of old cash one is caught with.

Possession of the old notes will only be permitted for the purpose of research and numismatics and the measure is intended to end any prospect of a "parallel currency" continuing after the deadline.

The ordinance will, however, have a clause allowing the people to deposit scrapped notes at the RBI branches, as promised by the government, after giving reasons for doing so.

The ordinance is expected to be replaced by a law in the Budget Session of Parliament.

The provision on providing a reason for exchanging old currency at the RBI branches is intended to facilitate submission of scrapped currency.

The ordinance is needed to end the liability of RBI Governor Urjit Patel to pay the bearer of the scrapped notes the value promised. Similar laws were enacted in the past after demonetisation of Rs 1,000, Rs 5,000 and Rs 10,000 notes in 1978.