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Finance Minister Arun Jaitley Presents Demonetisation Bill in Lok Sabha

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The Specified Bank Notes (Cessation of Liabilities) Bill, 2017 was introduced in the Lok Sabha on February 3, 2017 by the Union Finance Minister Arun Jaitley.The Bill provides for holding, transfer and receiving of old Rs 500 and Rs 1000 currency notes, which were demonetized after November 8, 2016, as a criminal offence and punishable with a minimum fine of Rs 10,000.

  • It seeks to replace the ordinance on demonetization announced by the government in December 2016.
  • The ordinance was approved by the President Pranab Mukherjee on December 30, making it illegal to hold transfer or receive demonetized  Rs 500 and Rs 1000 notes.
  • Besides, any Ordinance passed by a government should be replaced by appropriate Bill within 42 days of commencement of a session otherwise it will lapse.

Features of the Specified Bank Notes (Cessation of Liabilities) Bill 2017

The Specified Bank Notes (Cessation of Liabilities) Bill will end the liability of RBI and the government on the demonetized currency notes.

  • The bill mentions that the demonetisation decision of the union government was based on the recommendations of the RBI’s central board as an effective measure to eliminate unaccounted money and fake currency notes from the financial system. Arun Jaitley
  • The bill also provides that an Indian citizen who was outside the country between November 9 and December 30 should replace the demonetised notes within the grace period under rules provided by the RBI.
  • The Bill also prohibits the holding, transferring or receiving of these notes effective from December 31, 2016.
  • Once the Bill is passed by the Parliament, it will replace the ordinance promulgated on December 30.
  • As per the ordinance, holding more than 10 demonetized note would levy penalty of Rs 10,000 or five times the cash held, whichever is higher.
  • The ordinance seeked to amend the Reserve Bank of India (RBI) Act, 1934 to provide a legislative support for extinguishing the liability on the central bank and government on the demonetised banknotes that are not returned
  • However, any person or institution holding the junked notes for “study, research or numismatics” purposes would be exempt from penalty provided they hold not more than 25 such notes irrespective of the denomination.
  • The introduction of the Bill was highly opposed by Trinamool Congress leader Saugata Roy who named it as “illegal” and “anti-national”.