Printing of the Electoral Bond

Printing of the Electoral Bond

Subject: Polity

Context:

• According to two Right to Information replies from State Bank of India it has come to notice that the Union government has printed 10,000 electoral bonds worth Rs1 crore each sometime between August1 and October29

What is Electoral Bond:

• Electoral bonds are banking instruments that can be purchased by any citizen or company to make donations to political parties, without the donor’s identity being disclosed.
• It is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India.

What are the features of Electoral Bonds Scheme:

• A person being an individual can buy Electoral Bonds, either singly or jointly with other individuals. 
• The bonds are like banknotes that are payable to the bearer on demand and are interest-free.
• Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than one percent of the votes polled in the last General Election to the House of the People or the Legislative Assembly of the State, shall be eligible to receive the Electoral Bonds.

What is the procedure to purchase the electoral bond:

• The State Bank of India has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches.
• The bonds are sold by the SBI in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.
• One can purchase these bonds only digitally or through cheques.
• The Electoral Bonds can be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.
• The Electoral Bond deposited by an eligible Political Party in its account is credited on the same day.

Electoral Bonds shall be valid for fifteen calendar days from the date of issue and no payment is being made to any payee Political Party if the Electoral Bond is deposited after expiry of the validity period.