President Pranab Mukherjee on Friday approved the promulgation of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016, according to which citizens can be penalised for holding more than Rs 10,000 in the demonetised Rs 500 and Rs 1,000 notes after March 31, 2017. The order will come into effect on Saturday, December 31.
The ordinance also ensures that the Centre and Reserve Bank of India will not be liable for the demonetised Rs 500 and Rs 1,000 notes. This decision was believed to have been approved by the Cabinet to prevent future litigations against the government for its currency ban move.
While earlier reports had said that the penalty for possessing, transferring or receiving the old bills could be a four-year jail term, the Finance Ministry on Thursday clarified that the offence will not include a jail term, but a minimum fine of Rs 10,000.
On November 8, the government had demonetised Rs 500 and Rs 1,000 notes, which made up 86% of India’s currency, saying the move would help smoke out those hoarding black money. It has since said that the decision will also push India into becoming a cashless economy. The move has been widely criticised by the Opposition and economists, and citizens have faced a massive cash crunch ever since.