It will be a crime to have more than 10 banned notes after Friday, under a new rule approved by the government. An ordinance or executive order was cleared by the cabinet today and will be sent to the President for his sign-off. 500 and 1,000-rupee notes were banned by the government on November 8 in a massive anti-corruption move. Old notes can be deposited in banks till Friday, December 30. After that, only people who could not deposit their banned notes because of exceptional circumstances can do so, that too at the RBI or Reserve Bank of India.
The maximum number of banned currency notes that anyone will be allowed to keep is 10.
Those who couldn’t deposit old notes because they were abroad, or in inaccessible areas or are in the military will be allowed to do so at the RBI.
With this ordinance, Prime Minister Narendra Modi and his cabinet have ended the liability of the government and the central bank on the banned notes to prevent future litigation. Unless the liability ends, the RBI cannot turn away anyone carrying an old note.
There may be a fine of at least 50,000 rupees or five times the amount caught — whichever is higher. A magistrate will hear cases involving violation and decide on the punishment.
PM Modi has said the notes ban will help bring crores in black or unaccounted money back into the system.
The government’s move took out 86 per cent of the money in circulation.
According to the RBI, more than 13 lakh crores in old notes has already returned to the system as deposits.
People with undeclared money in old notes will have a one-time window to deposit their undeclared money in banned notes and pay 50 per cent in tax and penalty.
But anyone caught by the taxman will have to pay almost 90 per cent of the amount they have, says the government.
After the government restricted the amount of money that people could deposit or exchange without scrutiny at banks and post offices after the notes ban, many people with undeclared cash reportedly burned old notes, offered them in temples and some even threw them in rivers.