With just two days left for the deposit of the scrapped currency notes and amid cash crunch following the implementation of the demonetisation policy, the Reserve Bank of India had asked lenders to provide borrowers with additional 90 days for the repayment of loans.
In a related development, earlier in the day, government cabinet had cleared an ordinance to state the possession of scrapped currency notes of large amounts a penal offence which will be punishable with monetary fines. The cabinet headed by Prime Minister Narendra Modi, approved the promulgation of the ordinance, named The Specified Bank Notes Cessation of Liabilities Ordinance, which declares the possession of old currency notes of the denomination Rs 500 and Rs 1,000 a punishable offence.
The Specified Bank Notes Cessation of Liabilities Ordinance makes holding of old 1,000 and 500 rupee notes after March 31 beyond a threshold amount a criminal offence that will attract a monetary fine of Rs 10,000 or five times the cash held, whichever is higher. Furnishing wrong information while depositing the old currency between January 1 and March 31 will attract a fine of Rs 5,000 or five times the amount. Sources said the proposal put to the Cabinet was for a four-year jail term for anyone possessing a number of demonetised currency after March 31, 2017, but it was not immediately clear if it was approved.