ORDINANCE TO END LIABLITY OF RBI: CENTRE

Holding “a large number” of old `500 and `1,000 notes beyond March 31 will attract a fine of `10,000 or five times the cash held.

The Specified Bank Notes Cessation of Liabilities Ordinance will be sent to President Pranab Mukherjee for his assent. It is expected to be replaced by a law in the Budget session of Parliament, likely to begin by the end of January.

The ordinance would also amend the RBI Act to extinguish the government’s and the RBI’s liability — to pay the bearer of the scrapped notes the value promised. Similar laws were enacted in the past after the demonetisation of `1,000, `5,000 and `10,000 notes in 1978.

Mr Modi’s announcement of his radical monetary reform to a stunned nation scrapped `15.44 lakh crore overnight.

Of this, about `14 lakh crore has been either exchanged or deposited at banks.