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Penalty for failure to return old notes

As effect of demonetization of Rs 500/- and Rs 1,000/- notes announced by PM Narendra Modi on the 8th of November 2016, notes worth Rs.15.4 lakh crore has been deposited out of which 12.44 lakh crore has been reported to be returned to the system or exchanged by public. Initially the last date for deposition of the notes was 30th December 2016. However as per a new ordinance report announced by Union Cabinet on Wednesday, people may be permitted to deposit their old stash of cash till 31st March 2017 but with valid justification. Failure to do so may result in heavy penalty of around Rs 10,000 or five times the amount, whichever is higher.

As per the Ordinance, only specific offices of RBI would accept the old currencies. According to officials notes not returned to the banking system by 30th December would be extinguished, and as quoted by an official “the Ordinance was floated to manage the transition period between December 31 and March 31. Under conditions promissory status of the demonetised currency will continue till end-March.”  The ordinance comes into effect post approval of President Pranab Mukherjee and is expected to bring more clarity in the entire process.

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