Govt liability on note ban to end?

New Delhi: An ordinance to do away with the government and the RBI’s liability on the demonetised high denominations is likely to come up on Wednesday in what would be the year’s last Union Cabinet meeting.

Sources told a news agency that the ordinance is being brought as it was found to be necessary to prevent future litigations against the government for junking Rs 500 and Rs 1,000 notes.

Seeking to prevent harassment and any ambiguity, a proviso would be added to ensure that certain category of people can still deposit the old notes in RBI branches between December 31 and March 31 next, the sources were quoted as saying.

The category may include people in armed forces, people who were abroad and ordinary citizens who can explain that the money is part of their legitimate income and they could not deposit it in banks due to valid and justifiable reasons. There was no confirmation of a reported proposal of the government that seeks to impose penalty for possessing certain quantity of old notes after December 30.

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 Morarji Desai government.

The government had, while announcing the demonetisation of the old currency, allowed holders to either exchange them or deposit in bank and post office accounts. While the facility to exchange the old notes has since been withdrawn, depositors have time till Friday to deposit the holding in their accounts.