The Finance Ministry said on Thursday that State Bank of India (SBI), in its 21st phase of sale, is going to issue electoral bonds from July 1 to July 10 through its 29 authorized branches across India. The bonds are used to donate money to political parties. Here are the details about electoral bonds and who can buy them:
What are electoral bonds?
These bonds are used by individuals or entities to donate money to political parties. The bonds can be purchased in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore from 29 authorized branches of state-owned State Bank of India (SBI).
The bond must be encashed by the receiving political party within 15 days from the date of issue, failing which no payment is made to the party. The discounted amount is credited to the account of the political party on the same day the bond is deposited in the bank. Electoral Bonds will be encashed only through the bank account of a bank authorized by an eligible political party.
In simple words, anyone who wants to donate money to any political party needs to buy electoral bonds from any authorized branch of SBI, pay digitally or through cheque, as cash is not allowed. . The donor can then hand over the bond to the political party of his choice. Finally, the party can redeem the bond within 15 days from the date of issue.
Who can buy electoral bonds, which political parties can accept them?
Electoral Bonds can be purchased by a person who is a citizen of India or an entity incorporated or established in India. A person being an individual can buy electoral bonds either singly or jointly with other persons. The buyer will be allowed to purchase the Electoral Bonds only if he fulfills all the extant KYC norms and makes payment from the bank account. It will not contain the name of the recipient.
The bonds are available for purchase in the months of January, April, July and October for tenors of 10 days each. Electoral bonds can now be bought between July 1 and July 10.
Only political parties registered under Section 29A of the Representation of the People Act, 1951, and having secured at least one per cent of the votes polled in the previous Lok Sabha or State elections, are eligible to receive electoral bonds.
When and why were these bonds introduced?
Electoral bonds were introduced with the Finance Bill 2017 to “clean up the political funding system in the country”, and then the Electoral Bonds Scheme 2018 was notified.
In the budget speech on February 1, 2017, the then Finance Minister Arun Jaitley said: “Even after 70 years of independence, the country has not been able to develop a transparent method of funding political parties which is essential for the system of free and fair elections. Important. … Political parties get most of their money through anonymous donations which are shown in cash. Hence, efforts need to be made to clean up the political donation system in India.”
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