High Denomination Bank Notes (Demonetisation) Act, 1978
No: 11 Dated: Mar, 30 1978
THE HIGH DENOMINATION BANK NOTES (DEMONETISATION) ACT, 1978
ACT NO. 11 OF 1978
An Act to provide in the public interest for the demonetisation of certain high denomination bank notes and for matters connected therewith or incidental thereto. WHEREAS the availability of high denomination bank notes facilitates the illicit transfer of money for financing transactions which are harmful to the national economy or which are for illegal purposes and it is therefore necessary in the public interest to demonetise high denomination bank notes;
BE it enacted by Parliament in the Twenty-ninth Year of the Republic of India as follows:—
1. Short title, extent and commencement.—(1) This Act may be called the High Denomination Bank Notes (Demonetisation) Act, 1978.
(2) It extends to the whole of India.
(3) It shall be deemed to have come into force on the 16th day of January, 1978.
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “bank” means—
(i) a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(ii) the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955);
(iii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act,1959 (38 of 1959);
(iv) a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970);
(v) a regional rural bank established under sub-section (1) of section 3 of the Regional Rural Banks Act, 1976 (21 of 1976);
(vi) a co-operative bank as defined in section 2 of the Reserve Bank of India Act, 1934 (2 of 1934); and includes every branch thereof;
(b) “bank notes” means the bank notes issued by the Reserve Bank of India under section 22 of the Reserve Bank of India Act, 1934 (2 of 1934);
(c)“distinctive number” in relation to a high denomination bank note means the number including the alphabetical and numerical prefixes appearing on the face of the note;
(d) “high denomination bank note” means a bank note of the denominational value of one thousand rupees, five thousand rupees or ten thousand rupees, [issued by the Reserve Bank immediately before the commencement of this Act];
(e) “public sector bank” means a bank referred to in sub-clause (ii), (iii) or (iv) of clause (a);
(f) “Reserve Bank” means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2 of 1934);
(g) “scheduled bank” means a public sector bank or any other bank, being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);
(h) “State Bank” means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955).
3. High denomination bank notes to cease to be legal tender.—On the expiry of the 16th day of January, 1978, all high denomination bank notes shall, notwithstanding anything contained in section 26 of the Reserve Bank of India Act, 1934 (2 of 1934), cease to be legal tender in payment or on account at any place.
4. Prohibition of transfer and receipt of high denomination bank notes.—Save as provided by or under this Act, no person shall, after the 16th day of January, 1978, transfer to the possession of another person or receive into his possession from another person any high denomination banknote.