The Centre has asked state governments to refrain from cracking down on people found to be hoarding and transporting currency notes as banking and enforcement of black money-related issues came strictly under central laws.
Only the Enforcement Directorate (ED), the I-T department and the Central Bureau of Investigation (CBI) were empowered to act on cases of transportation and hoarding of currency notes, the Centre told states a fortnight ago.
“Unless specifically authorised under central law, the state agencies may not enforce the law themselves, but bring it to the notice of the relevant central law enforcement agencies—Income Tax (I-T), CBI and ED,” an I-T department communication to state governments said.
Last month Prime Minister Narendra Modi in a surprise announcement scrapped Rs 500 and Rs 1000 notes, taking away their legal tender status from midnight of November 8.
The government has pitched the move as part of a broader strategy to clamp down on India’s bustling parallel economy where deals take place in cash.
These transactions remain outside the legitimate financial system, evading tax and hoodwinking authorities by obscuring the flow and source of slush money.
The demonetisation move has set in motion the world’s largest currency culling exercise with people given 50-days to deposit old notes in banks and post-offices by December 30.
Old notes can be exchanged in specified RBI counters till March 31.
The communication to state governments came amid a string of instances across the country where people were found illegally hoarding new currency notes.
Suspected bank officials were believed to have helped some clients to funnel new notes even as people were seen queuing up outside bank branches and ATMs to withdraw money.
The government has imposed a bank money withdrawal ceiling—Rs 24,000 a week from branches and Rs 2,500 a day from ATMs—as a temporary measure to help calibrate the supply of new notes from the RBI’s currency presses to banks and ATMs.
The December 15 communication, reviewed by Moneycontrol, also said that “Mere holding or carrying of SBN (specific bank notes or scrapped currencies) or new currency is not an offence, as there is no law to prevent or regulate holding or transportation of Indian currency.”
This clause will likely be reviewed following changes in laws that the Cabinet has approved making it illegal to hold more than 10 units of scrapped Rs 500 and Rs 1000 notes
On Wednesday, the Union Cabinet approved the proposal to promulgate an ordinance that will make holding more than 10 notes of the banned 500 and 1000-rupee notes, after March 31 a punishable offence.
The Specified Bank Notes Cessation of Liabilities Ordinance would come into effect after it is approved by the President Pranab Mukherjee.
Read more at: http://www.moneycontrol.com
Only the Enforcement Directorate (ED), the I-T department and the Central Bureau of Investigation (CBI) were empowered to act on cases of transportation and hoarding of currency notes, the Centre told states a fortnight ago.
“Unless specifically authorised under central law, the state agencies may not enforce the law themselves, but bring it to the notice of the relevant central law enforcement agencies—Income Tax (I-T), CBI and ED,” an I-T department communication to state governments said.
Last month Prime Minister Narendra Modi in a surprise announcement scrapped Rs 500 and Rs 1000 notes, taking away their legal tender status from midnight of November 8.
The government has pitched the move as part of a broader strategy to clamp down on India’s bustling parallel economy where deals take place in cash.
These transactions remain outside the legitimate financial system, evading tax and hoodwinking authorities by obscuring the flow and source of slush money.
The demonetisation move has set in motion the world’s largest currency culling exercise with people given 50-days to deposit old notes in banks and post-offices by December 30.
Old notes can be exchanged in specified RBI counters till March 31.
The communication to state governments came amid a string of instances across the country where people were found illegally hoarding new currency notes.
Suspected bank officials were believed to have helped some clients to funnel new notes even as people were seen queuing up outside bank branches and ATMs to withdraw money.
The government has imposed a bank money withdrawal ceiling—Rs 24,000 a week from branches and Rs 2,500 a day from ATMs—as a temporary measure to help calibrate the supply of new notes from the RBI’s currency presses to banks and ATMs.
The December 15 communication, reviewed by Moneycontrol, also said that “Mere holding or carrying of SBN (specific bank notes or scrapped currencies) or new currency is not an offence, as there is no law to prevent or regulate holding or transportation of Indian currency.”
This clause will likely be reviewed following changes in laws that the Cabinet has approved making it illegal to hold more than 10 units of scrapped Rs 500 and Rs 1000 notes
On Wednesday, the Union Cabinet approved the proposal to promulgate an ordinance that will make holding more than 10 notes of the banned 500 and 1000-rupee notes, after March 31 a punishable offence.
The Specified Bank Notes Cessation of Liabilities Ordinance would come into effect after it is approved by the President Pranab Mukherjee.
Read more at: http://www.moneycontrol.com
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