Electoral bonds

  • The electoral bonds scheme was announced in Union Budget 2017 with an aim for increasing transparency in political funding.
  • It makes India first country in the world to have such unique bonds for electoral funding.
  • These bonds are bearer instrument in nature of promissory note and interest-free banking instrument.
  • It aims at rooting out current system of largely anonymous cash donations made to political parties which lead to generation of black money in the economy.
  • These electoral bonds can be bought for any value in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore after fulfilling all existing Know Your Customer (KYC) norms and making payments from bank account.
  • It will not carry name of payee.
  • The bond deposited by any eligible political party to its account shall be credited on the same day.
  • No payment shall be made to any payee political party if bond is deposited after expiry of validity period.
  • Eligible political parties can encash electoral bonds only through their bank accounts.
  • Electoral Bonds may be purchased by only citizen of India.
  • An individual can buy Electoral Bonds, either singly or jointly with other individuals.
  • Electoral Bonds are valid for fifteen calendar days from the date of issue.
  • Only registered political parties, that have secured not less than 1% of votes polled in last election of Lok Sabha or legislative assembly of state, will be eligible to receive electoral bonds.
  • The cash donation has been capped at Rs. 2000 and beyond that donations are via electoral bonds.