BackNRIs can deposit old notes till 30 June, says ordinance
President Pranab Mukherjee approves ordinance imposing stiff fines on residents holding or trading in demonetized currency
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New Delhi: On the day that the deadline for depositing demonetized notes in bank accounts expired, President Pranab Mukherjee approved an ordinance allowing more time for non-resident Indians to deposit their old notes and imposing stiff fines on residents holding or trading in demonetized currency.
The details of the ordinance released by the finance ministry reveal that non-resident Indians (NRIs) can deposit such notes, up to a maximum of Rs25,000, till 30 June.
The same limit will apply to resident Indians who were abroad between 8 November and 30 December, but they will have to turn in the old notes by 31 March at designated offices of the Reserve Bank of India (RBI).
RBI will separately issue details of the declaration and statements required to be furnished along with the demonetized notes at the time of deposit in its branches.
“Any false declaration will invite a fine of Rs50,000 or five times the amount of the face value of the SBNs (specified bank notes) tendered, whichever is higher," the finance ministry said in a statement.
Limiting the facility to Indians who were not present in the country during the 50-day demonetization period may trigger a controversy. In his 8 November address to the nation, Prime Minister Narendra Modi had promised that even beyond 30 December, people could deposit demonetized notes at specified branches of RBI after submitting a declaration.
The finance ministry said once the deposit period gets over, the liabilities of RBI and the guarantee of the central government towards SBNs will stand extinguished.
After this period, holding, transferring and receiving such notes will attract a fine of Rs10,000 or five times the value of the notes, whichever is higher.
The Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 is a follow-up to the decision taken by the government to cancel the legal tender character of the existing series of Rs500 and Rs1,000 banknotes on 8 November.
However, it is not clear how RBI will account for the reduction in liability on its books. A senior government official said, “We will have to work out the details".
“The main objectives of the ordinance are (i) to provide clarity and finality to the liability of the Reserve Bank of India and the government of India for the SBNs; (ii) to provide an opportunity to those persons who were unable to deposit the SBNs within the time provided; and (iii) to declare holding, transferring or receiving SBNs as illegal, with provisions for penalty for contravention of any of the provisions of the ordinance," the finance ministry statement said.
Modi is expected to announce a slew of incentives in his address to the nation on Saturday.
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