Union Cabinet approves ordinance to amend RBI Act

The Union Cabinet approved the promulgation of an ordinance on Wednesday to impose penalty that may include jail term for possessing the scrapped Rs. 1,000 and old Rs. 500 notes beyond the date of March 31.

The Cabinet, headed by Prime Minister Narendra Modi, also approved an ordinance to amend the RBI Act to extinguish the liability of the government and the central bank on the demonetised notes to prevent future litigation’s.

Official sources said the ordinance was 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 such currency at specified branches of the Reserve Bank, after submitting a declaration form, is open.

While announcing the demonetisation on November 8, the government had allowed people to either exchange demonetised notes or deposit them in bank and post office accounts.

While the facility to exchange the banned notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.

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