More reports on: Government policies

Possessing scrapped Rs500 and Rs1,000 notes to attract penalty

02 March 2017

Possession of old demonetised currency notes has now become illegal with the government notifying the law that makes holding of more than 10 units of the scrapped Rs500 andRs1,000 notes punishable with a minimum fine of Rs10,000.

The Specified Bank Notes (Cessation of Liabilities) Act, 2017, passed by Parliament last month, received the President's consent on 27 February.

The law, which makes possession of more than 10 units of the demonetised Rs500 and Rs1,000 notes, irrespective of the denomination, also ends the liability of the Reserve Bank of India (RBI) and the government on these currency notes.

The law thus aims at eliminating the ''possibility of running a parallel economy'' using the old Rs500 and Rs1,000 notes that have been demonetised.

The law also provides for a minimum fine Rs50,000 for false declaration by persons who were abroad during the demonetisation period (9 November to 30 December 2016) and prescribes time till 1 March for depositing such scrapped notes with the RBI.

It prohibits holding of "more than 10 notes in total, irrespective of the denomination" after expiry of the 50-day deadline on December 30 for depositing the junked currency in banks or post offices.

The law, however, allows holding up to 25 such notes for "the purposes of study, research or numismatics".

Violations are "punishable with a fine which may extend to Rs10,000 or five times the amount of the face value of the specified bank notes involved in the contravention, whichever is higher", the law states.

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