The government today finalised the terms of issuance of electoral bonds during the ongoing winter session of Parliament.
These bonds will be interest-free banking instruments like promissory notes that can be encashed by an eligible political party through a designated bank account, Finance Minister Arun Jaitley said in the Lok Sabha today.
The Narendra Modi government mooted the idea of electoral bonds in Budget 2017-18 to make political funding more transparent. The bonds were pitched as an alternative to cash donations made to political parties.
Here's a quick explainer on how these bonds work, according to a statement issued by the government.
What is an electoral bond?
- A bearer instrument in the nature of a promissory note
- An interest-free banking instrument
Who can purchase electoral bonds?
- A citizen of India or a body incorporated in India.
Where can these bonds be purchased?
- Select branches of the State Bank Of India
Denominations of electoral bonds
These bonds can be purchased in the denomination of Rs 1000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, Rs 1 crore.
What does the purchaser need to do to buy an electoral bond?
- Needs to satisfy extant KYC requirement while opening an account.
- Payment to purchase the bond can be done only through a bank account.
- The bonds will not carry the name of the payee.
What will be the tenure of the bond?
- The life of the electoral bonds will be 15 days.
When can the bonds be bought?
- Available for 10 days each in January, April, July and October
- Additional 30 days to be specified in the year of Lok Sabha polls
Eligible political party
- Donations can be made to political parties registered under Section 29A Representation of the Peoples Act, 1951.
- The party should have secured more than 1 percent of vote share in the previous Lok Sabha or Legislative Assembly polls.
How will the bonds be encashed?
- The political party will encash the bond through a designated bank account.
Also Read: Electoral Bonds A Disaster For Public Transparency: Milan Vaishnav
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