Centre has notified the law that makes holding of more than 10 scrapped currency notes of Rs 1000 and Rs 500 a punishable offense with a minimum fine of Rs 10,000. Those were banned after the government’s move to demonetise the currency on November 8, 2016.
The law was signed by President Pranab Mukherjee on February 27.
The Specified Bank Notes (Cessation of Liabilities) Act, 2017, has already been passed by Parliament last month with a view to eliminating the “possibility of running a parallel economy” using the old Rs 500/1,000 notes that have been demonetised.
It also provides for a minimum fine Rs 50,000 for false declaration by persons who were abroad during the demonetisation period (November 9-December 30, 2016) and given time to deposit such scrapped notes with RBI till March 31.
With the law coming into force, possession of more than 10 pieces of the old notes by individuals and more than 25 pieces for study, research or numismatics purpose will be a criminal offence, attracting fine of Rs 10,000 or five times the cash held, whichever is higher.
The Act also ends the liability of the Reserve Bank of India (RBI) and the government on the demonetised currency notes.
The law prohibits the holding, transferring or receiving of scrapped notes from December 31, 2016, and seeks to confer power on the court of a first class magistrate to impose penalty.
The move to demonetise the higher denomination currency notes Rs 500 and Rs 1000 has led to a sharp debate between the Opposition and the government, with former terming it an “anti-poor” move. Meanwhile, the government on its part have backed the move as the one to fight graft and eliminate unaccounted money and fake currency notes from the financial system.
Winter session of Parliament last year too was rocked by the issue with protests and walkouts leading to near of no business transacted through the session.
(With inputs from the PTI)