ORDINANCE ON NOTE BAN LIKELY TODAY

An ordinance to do away with the government and the Reserve Bank of India’s liability on the demonetised high denomination notes is likely to come up on Wednesday in what would be the year’s last meeting of the Union Cabinet.

Sources told a news agency that the ordinance is being brought as it was found to be necessary to prevent future litigations against the government for junking `500 and `1,000 notes.

Seeking to prevent harassment and any ambiguity, a proviso would be added to ensure that certain category of people can still deposit the old notes in RBI branches between December 31 and March 31 next, the sources were quoted as saying.

The category may include people in the armed forces, people who were abroad and ordinary citizens who can explain that the money is part of their legitimate income and they could not deposit it in banks due to valid and justifiable reasons.

There was no confirmation of a reported proposal of the government that seeks to impose penalty for possessing certain quantity of old notes after December 30.

In 1978, a similar ordinance was issued to end the government’s liability after `1,000, `5,000 and `10,000 notes were demonetised by the Morarji Desai government. The government had, while announcing the demonetisation of the old currency on November 8, allowed holders to either exchange them or deposit them 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 While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.