No jail term for holding demonetised notes; minimum fine to be Rs 10,000

A day after approving an ordinance regarding punishment for those holding old notes in possession, government officials on Thursday clarified that keeping demonetised notes will not land you in jail, according to a PTI report. It also said that the minimum fine for holding old notes beyond March 31 will be Rs 10,000.

Earlier, the Cabinet approved the promulgation of an ordinance extinguishing the Reserve Bank of India's liability for cancelled Rs 500 and Rs 1,000 notes as the logical conclusion to the government's demonetisation initiative.

The ordinance expected to provide a limited window for depositing the cancelled notes at select RBI branches until March 31 and also prescribes a monetary penalty for anyone holding such currency in large quantities after the deadline.

The details of the ordinance that amends the RBI Act and completes the demonetisation exercise will be released when it receives presidential assent. The old notes can be deposited in banks until December 30.

While announcing demonetisation on November 8, Prime Minister Narendra Modi had said the Rs 500 and Rs 1,000 notes would cease to be legal tender, this having been achieved through a notification. But experts felt extinguishing the liability completely needed a change in the law since every note issued by the central bank carries a promise that the bearer is entitled to the value printed on it.

Of the Rs 15.4 lakh crore of currency that was scrapped, about Rs 14 lakh crore is estimated to have already been deposited in banks or exchanged.