Ordinance to Penalize People holding Banned notes beyond March 31st 2017 is cleared by Cabinet

The Union cabinet cleared on Wednesday an ordinance to penalize those found holding a “high amount” of scrapped banknotes.

The Specified Bank Notes Cessation of Liabilities Ordinance makes holding a large number of old Rs 1000 and Rs 500 notes a criminal offence that will attract a jail term and a monetary penalty of five times the amount of old cash one is caught with.

The ordinance allows exchange of limited amounts of banknotes at offices of the Reserve Bank of India until March 31.

“There will be strict monitoring of the source of the old notes exchanged after December 30 at RBI offices,” said a finance ministry official who didn’t want to be named.

The ordinance also has a set of exceptions for which old notes will be permitted to be used, sources said.