The ordinance on demonetised currency notes approved by the union cabinet on Wednesday makes holding of old Rs1,000 and Rs500 notes beyond a maximum of 10 units after 31 December 2016 a criminal offence and will attract a minimum monetary fine of Rs10,000 and not any jail term as reported earlier.
The ordinance as it stands now will be effective from 31 December as there is no mention of a 31 March 2017 deadline for depositing demonetised currency notes.
The proposal of four-year jail term for anyone possessing demonetised currency in excess of a prescribed limit after 31 March 2017 was also not incorporated in the ordinance, say reports.
The ordinance will now go to the President and after his assent will come into force.
The ordinance provides for amending the Reserve Bank of India (RBI) Act to provide legislative support for extinguishing the demonetised bank notes that are not returned.
While announcing the demonetisation of the old currency on 8 November, the government had allowed holders to either exchange them or deposit in bank and post office accounts. While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.
The government had earlier said that these notes can be deposited with specified branches of RBI till 31 March, but only for exigencies, and after submitting a declaration form.