A law making holding of old notes punishable has been notified by the government of India. The law was notified after the Cabinet had approved the promulgation of an ordinance in which it was said that holding of old notes would be illegal.
The new law states that there would be specified fines ranging between Rs 5,000 and Rs 50,000 for possession of demonetised notes. The fine would be a multiple of the number of notes found in possession beyond the permissible limit.
The decision was taken to prevent exploitative distribution of old money as wages and payments to the poor. Further this law would also prevent possession of two types of notes of the same denomination being in circulation at the same time. The government has allowed certain categories of people to deposit old notes at the RBI till March 31.