Bill in LS to make holding of scrapped notes punishable

Finance Minister Arun Jaitley's The Specified Bank Notes (Cessation of Liabilities) Bill 2017, popularly known as demonetisation Bill may face strong opposition from the opposition parties in the Rajya Sabha. Mainly opposition Congress and Trinamul Congress have called a meeting of the opposition parties to stall the Bill for passing in the first half of the Budget Session which is scheduled to be presented on February 9.

Government on Friday introduced in Lok Sabha a bill that provides for holding, transfer and receiving of old Rs 500 and Rs 1000 currency notes a criminal offence, punishable with a minimum fine of Rs 10,000.

The Specified Bank Notes (Cessation of Liabilities) Bill, which seeks to end the liability of RBI and the government on the currency notes demonetised in November last, was introduced by Finance Minister Arun Jaitley amid stiff opposition by Trinamool Congress, which called it "illegal" and "anti-national".

Once passed by Parliament, the bill will replace an ordinance promulgated on December 30 last which provides for a fine of Rs 10,000 or five times the cash held, whichever is higher, on holding of more than 10 banned 1,000 and 500 Rupee notes.

The bill states that the government took the demonetisation decision on the recommendations of the RBI's central board to eliminate unaccounted money and fake currency notes from the financial system. Apart from aiming at ceasing the liability on old notes, the bill also provides that an Indian citizen, who was outside the country between November 9 and December 30, will be entitled to tender the demonetised noted within the grace period under rules provided by the RBI.

It also prohibits the holding, transferring or receiving of these notes from December 31, 2016. It also seeks to impose penalty for contravention of the ordinance, which it will replace, and to confer power upon the court of a first class Magistrate to impose penalty.

The ordinance provided for amending the Reserve Bank of India (RBI) Act, 1934 to provide legislative support for extinguishing the central bank and government's liability on the demonetised banknotes that are not returned.

"The main objectives of the ordinance are to provide clarity and finality to the liability of the RBI and the Government of India for the specified bank notes (of 1,000 and 500); to provide an opportunity to those persons who were unable to deposit the SBNs within the time provided; and to declare holding, transferring or receiving SBNs as illegal, with provisions for penalty for contravention of any of the provisions of the Ordinance," it said. Those keeping the junked notes for "study, research or numismatics" purposes would be exempt from penalty provided they hold not more than 25 number of such notes irrespective of the denomination.