Electoral Bond Fund-What is it and how does it work?

Electoral bond issue cropped up again recently after the Supreme Court admitted a petition in this regard.

Political parties receive election donations from electoral bonds. This has been going on since January 2018. In donations received through electoral bonds, the identity of the donor is kept secret.

Though it has been five years since the electoral bonds were issued, even now people have very little information about it. Most people think of it as an investment bond, but it is not.

Electoral bonds were introduced as an alternative to cash donations to political parties. Their aim was to increase transparency in political funding. State Bank of India is the only bank authorized to issue electoral bonds.

The then Finance Minister Arun Jaitley had introduced the Electoral Bond Scheme in the budget of 2017. After this, it was approved by the Central Government next year on 29 January 2018. The scheme has been introduced as an alternative to cash donations to parties as part of efforts to bring transparency in political funding. According to the provisions of this scheme, electoral bonds can be purchased by any citizen of India or any institution established in India. An individual can purchase electoral bonds, either singly or jointly with others.

To obtain electoral bonds, a party must be registered under Section 29A of the Representation of the People Act, 1951. Apart from this, only those who have secured at least 1 percent of the votes cast for Lok Sabha or Assembly in the last general election are eligible to obtain electoral bonds.

The Electoral Bond Scheme is known in English as ‘Electoral Bonds Scheme’. These are available from selected branches of State Bank of India. These can be purchased from 29 branches of SBI. It can be purchased from SBI branches in many cities including New Delhi, Gandhinagar, Chandigarh, Bengaluru, Hyderabad, Bhubaneswar, Bhopal, Mumbai, Jaipur, Lucknow, Chennai, Calcutta and Guwahati.

As per the provisions of the scheme, any citizen of India or entity incorporated or established in the country can purchase electoral bonds. These bonds can be of one thousand, ten thousand, one lakh and up to one crore rupees. After KYC verification, the political party is able to redeem the bonds in its account. The specialty of this bond is that it is not known who made the donation. When this bond is issued by the bank, it can be availed within 15 days.