Prime Minister Narendra Modi led the Union Cabinet has approved an ordinance to impose a penalty, including a jail term, for possession of the scrapped 500 and 1,000 rupee notes beyond a cut-off.
The Cabinet also approved an ordinance to amend the RBI Act to turn off the liability of the government and the central bank on the demonetized high-denomination notes to prevent future litigations. According to official sources, the ordinance has been cleared, but did not say if the penal provisions would apply for holding the junked currency after ends as deadline 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 ordinance on denotification of Rs 500 and Rs 1000 notes has been sent to President Pranab Mukherjee for his assent. 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. After December 31, the government through a separate notification and clarification will specify cases eligible to get the banned currency deposited in specified branches of the RBI. The ordinance is expected to be replaced by a law in the Budget session of Parliament, likely to begin by the end of January.