Prime Minister Narendra Modi interacting with the economists and other experts, on the theme Economic Policy  The Road Ahead, organised by the NITI Aayog in New Delhi on Tuesday (PTI Photo / PIB) Prime Minister Narendra Modi interacting with the economists and other experts, on the theme Economic Policy  The Road Ahead, organised by the NITI Aayog in New Delhi on Tuesday (PTI Photo / PIB)

The Cabinet has cleared the promulgation of an ordinance with the aim of penalising those found holding the junked Rs 500 and Rs 1,000 currency notes after the deadline ends. The ordinance will extinguish the liability of the government and the Reserve Bank of India on the demonetised notes.

A senior government official had told The Indian Express that putting a cap on the deposit of the old notes on December 30 will help the government in better estimating the money coming back into the system and help it in making projections for the Union Budget 2017-18. The official added that a three month window between January 1, 2017 and March 31, 2017 for deposit of old currency notes in specified offices of the RBI will remain open, but only for exigencies.

WATCH | Cabinet Approves Ordinance To Penalise People Holding Banned Notes

Official sources told PTI they were unsure whether the penal provisions would apply for holding the junked currency after the 50-day window to deposit them in banks ends as of December 30 or after March 31, till which time deposit of old currency notes at specified branches of the Reserve Bank after submitting a declaration form is open.

The penalty for holding junked notes in excess of 10 notes may attract financial fines and a jail term of up to four years in certain cases.

In 1978, the then government under Morarji Desai had issued a similar ordinance to end the government’s liability after Rs 1,000, Rs 5,000 and Rs 10,000 currency notes were withdrawn.

The government had announced the demonetisation move on the night of November 8 in a bid to flush out black money, cut down on corruption and eliminate terrorist funding from counterfeit notes. December 30 was the deadline specified by the Centre for people to deposit/exchange old notes. Since then, while exchange of notes has been stopped, deposit of the scrapped currency can still be done at banks till Friday.

(With inputs from PTI)

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