Electoral bonds

08..12.2023

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Why in news?

According to recently released State Bank of India (SBI) data, political funding through anonymous electoral bonds increased during the recent assembly elections in Telangana, Rajasthan, Madhya Pradesh, Chhattisgarh and Mizoram compared to the previous elections held in these states in 2018. increased by more than 400%.

Important points:

• In the latest sale (29th tranche) under the electoral bond scheme, the highest sale was in Telangana capital Hyderabad (Rs 359 crore), followed by Mumbai (Rs 259.30 crore) and Delhi (Rs 182.75 crore).
• No sales were recorded in Mizoram.
•  In the most recent (29th) tranche of the sale, held from November 6 to November 20, electoral bonds worth Rs 1,006.03 crore were sold and encashed.
• Out of which 99 percent of the total amount was raised through the sale of bonds of denomination Rs 1 crore.
• The total amount collected by parties through the poll bond scheme in 29 phases since 2018 has now crossed Rs 15,922.42 crore.

About Electoral Bonds:

• The electoral bond system was introduced through a Finance Bill in 2017.
• It was implemented in 2018.
• An electoral bond is like a promissory note which can be purchased by a person who is a citizen of India or is incorporated or established in India.
• Any person can purchase electoral bonds either singly or jointly with other persons.
• Bonds are like bank notes that are payable to the holder on demand and are interest free.
• Electoral bonds serve as a means for individuals and institutions to donate to registered political parties while maintaining the anonymity of the donor.
• It is payable to the holder on demand and interest free.
• It is purchased by Indian citizens or entities established in India.
• It can be purchased individually or jointly with other persons.
• It is valid for 15 calendar days from the date of issue.

Electoral bond is issued:

• State Bank of India (SBI) is the only authorized issuer of electoral bonds.
• State Bank of India (SBI) issues bonds in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.
• Electoral bonds are issued through designated SBI branches.
• Electoral bonds can be purchased digitally or through cheque.
• Encashment only through authorized bank account of the political party.
• Political parties have to disclose their bank accounts with the Election Commission of India (ECI).

Eligibility to receive electoral bonds:

Only those political parties which are registered under Section 29A of the Representation of the People Act (RPA), 1951 and which have secured at least one per cent of the votes polled for the Lok Sabha or the Legislative Assembly in the last general election. States will be eligible to receive electoral bonds.