Possessing old Rs 500 and Rs 1,000 notes after March 31 will land you in jail

An ordinance, named 'The Specified Bank Notes Cessation of Liabilities Ordinance', has been approved by the cabinet. As per the ordinance, anybody possessing the demonetised Rs 500 and Rs 1,000 notes will be slapped with a penalty, including a jail term.

So as to prevent future litigations, the cabinet also approved an ordinance to amend the RBI Act to extinguish the liability of the government and the central bank on the demonetised high-denomination notes.

Reportedly, sources said the ordinance has been cleared. However, they did not say if 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 old currency in excess of 10 notes may include financial fines and a jail term of up to 4 years in certain cases.

While announcing the demonetisation of the old currency on November 8, the government had allowed holders to either exchange them or deposit in bank and post office accounts. While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.