Cabinet clears ordinance, heavy fine to be imposed on holders of old notes

To permanently end the legal tender status of the old Rs 1,000 and Rs 500 notes, the Cabinet Wednesday approved promulgation of an ordinance to make possession of a large number of scrapped banknotes a penal offence from December 31. The Specified Bank Notes Cessation of Liabilities Ordinance, 2016 makes holding of the old currency notes, beyond a threshold amount, a criminal offence which, sources said, could attract a monetary fine of Rs 10,000 or five times the cash held, whichever is higher.

The ordinance will come into effect after the President gives his assent.