Former RBI Deputy Governor KC Chakrabarty on Tuesday said that Government is Reserve Bank of India will have to honour demonetised currency of Rs 500 and Rs 1000 anytime till the law is changed, CNBC TV-18 reported on Tuesday. Chakrabarty’s comments come amid reports of government mulling a ordnance to end the legality of notes. Yesterday, a PTI report had said that government is understood to be mulling an ordinance to impose penalties on anyone possessing the junked Rs 500 and Rs 1000 notes beyond December 30. The report said that ordinance may end government and RBI’s liability towards the promise to pay the bearer of these notes their value because of a statutory requirement.
However, there is no official announcement on the ordinance, which government may take up before the Cabinet on Wednesday. However, this is not the first time government will be bringing such an ordinance. In 1978 a similar ordinance was issued to end the government’s liability after Rs 1,000, Rs 5,000 and Rs 10,000 notes were demonetised by the Janata Party government under Morarji Desai.
Some reports said that there a cap of holding no more than 10 notes of each after December 30 and violation of the rule could draw a fine of a minimum of Rs 50,000 or 5 times the amount in question — whichever is higher. There is no confirmation though. Holders of such currency have an option to deposit them in RBI by March 31 but even that period may be curtailed, they said.