The ordinance will formalise the demonetisation, which was an executive decision announced on 8 November. According to a in The Indian Express, which quotes a government official, this is a requirement as otherwise the demonetised notes will continue as a legal tender.
“If we do not put an end date on the legal character of the old notes, then they can be infinitely valid as a legal tender,” the official has been quoted as saying in the report. Explaining the rationale, he also said ending the legal tender of all notes on 30 December is important as it will clear the uncertainty for the government on how much money has flown into the system.
