The Union Cabinet on Wednesday cleared the promulgation of an ordinance under which possessing, transferring of receiving an amount of Rs 10,000 in banned 500 and 1,000 notes will be a punishable offence.
As per the ordinance the maximum of 10 notes person will be allowed. The name of the ordinance is called, The Specified Bank Notes Cessation of Liabilities Ordinance. The Cabinet also decided that the last date for deposit of old currency would be Friday. After December 30, the old notes can be deposited only at select offices of the RBI.
The Cabinet has also decided to impose a fine if the law is broken. While there is no decision as yet on the exact amount of fine, sources indicate that it could be Rs 50,000 or five times the amount in question or whichever is higher. The Cabinet also decided that there would be a criminal liability and a municipal magistrate will hear cases. The penalty would be decided by the magistrate and he could even sentence a person up to four years in jail.
These decisions were taken to help the government get a better estimate of the money coming back into the system. This would in turn help the government make better projections in the Union Budget. A three month window between January 1 and March 31, 2017 would remain open to deposit old currency in specified offices of the RBI.