Electoral Bonds

30-Jun-2022: Sale of Electoral Bonds at Authorized Branches of State Bank of India (SBI)

The Government of India has notified the Electoral Bond Scheme 2018 vide Gazette Notification No. 20 dated 2nd January 2018. As per provisions of the Scheme, Electoral Bonds may be purchased by a person (as defined in item No. 2 (d) of Gazette Notification), who is a citizen of India or incorporated or established in India. A person being an individual can buy Electoral Bonds, either singly or jointly with other individuals. Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent 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. The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.

State Bank of India (SBI), in the XXI Phase of sale, has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches (as per list enclosed below) w.e.f. 01.07.2022 to 10.07.2022.

The Electoral Bonds shall be valid for fifteen calendar days from the date of issue and no payment shall be made to any payee Political Party if the Electoral Bond is deposited after expiry of the validity period. The Electoral Bond deposited by an eligible Political Party in its account shall be credited on the same day.

30-Mar-2022: Sale of Electoral Bonds at Authorized Branches of State Bank of India (SBI)

Government of India has notified the Electoral Bond Scheme 2018 vide Gazette Notification No. 20 dated 02nd January 2018. As per provisions of the Scheme, Electoral Bonds may be purchased by a person (as defined in item No. 2 (d) of Gazette Notification), who is a citizen of India or incorporated or established in India. A person being an individual can buy Electoral Bonds, either singly or jointly with other individuals. Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent 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. The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.

State Bank of India (SBI), in the XXth Phase of sale, has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches ( as per list enclosed) w.e.f. 01.04.2022 to 10.04.2022.

30-Dec-2021: Sale of Electoral Bonds at Authorised Branches of State Bank of India (SBI)

The Government of India has notified the Electoral Bond Scheme 2018 vide Gazette Notification No. 20 dated 02nd January 2018. As per provisions of the Scheme, Electoral Bonds may be purchased by a person (as defined in item No. 2 (d) of Gazette Notification), who is a citizen of India or incorporated or established in India. A person being an individual can buy Electoral Bonds, either singly or jointly with other individuals. Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent 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. The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.

State Bank of India (SBI), in the XIX Phase of sale, has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches w.e.f. 01.01.2022 to 10.01.2022.

27-Jun-2019: Sale of Electoral Bonds at Authorised Branches of State Bank of India (SBI)

The Government of India has notified the Electoral Bond Scheme 2018 vide Gazette Notification No. 20 dated January 02, 2018. As per provisions of the Scheme, Electoral Bonds may be purchased by a person (as defined in item No. 2 (d) of Gazette Notification), who is a citizen of India or incorporated or established in India. A person being an individual can buy Electoral Bonds, either singly or jointly with other individuals. Only the Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one per cent 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. The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank.

State Bank of India (SBI), in the XI Phase of sale, has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches ( as per list enclosed) w.e.f. 01.07.2019 to 10.07.2019.

It may be noted that Electoral Bonds shall be valid for fifteen calendar days from the date of issue and no payment shall be made to any payee Political Party if the Electoral Bond is deposited after expiry of the validity period. The Electoral Bond deposited by an eligible Political Party in its account shall be credited on the same day.

27-Oct-2018: 6th tranche of electoral bonds sale to kick off from November 1

The sixth tranche of electoral bonds sale will take place from November 1-10. Electoral bonds are being pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding.

State Bank of India, in the 6th phase of sale, has been authorised to issue and encash electoral bonds through its 29 authorised branches with effect from November 1 to 10. The 29 specified SBI branches are in cities like New Delhi, Gandhinagar, Chandigarh, Bengaluru, Bhopal, Mumbai, Jaipur, Lucknow, Chennai, Kolkata and Guwahati.

The electoral bond sales comes at a time when assembly election process in five states including Rajasthan and Madhya Pradesh has started. The Model Code of Conduct is in force in these states.

The government notified the Electoral Bond Scheme in January this year. As per provisions of the scheme, electoral bonds may be purchased by a person, who is a citizen of India or entities incorporated or established in India.

Registered political parties that have secured not less than 1 per cent of the votes polled in the last election of the Lok Sabha or legislative assembly will be eligible to receive electoral bonds.

The sale of first batch of electoral bonds took place from March 1-10, 2018. The second phase was launched from April 2-10. The third phase took place during May 1-10, fourth tranche was launched from July 2-11 and fifth was between October 1 and October 10.

SBI is the only authorised bank to issue such bonds. A person being an individual can buy electoral bonds, either singly or jointly, with other individuals.

An electoral bond will be valid for 15 days from the date of issue. No payment would be made to any payee political party if the bond is deposited after expiry of the validity period. The bond deposited by any eligible political party into its account would be credited on the same day.

7-Jan-2018: Why Electoral Bonds are Necessary?

"India is the largest democracy in the world. However, despite strengthening various institutions for the last seven decades, India has not been able to evolve a transparent political funding system. Elections and political parties are a fundamental feature of Parliamentary democracy. Elections cost money. The round the year functioning of the political parties involves a large expenditure. Parties run offices throughout the country. Staff salaries, travelling expenses, establishment cost are regular expenditures of political parties. There has not been a single year where election either for the Parliament or State Assemblies have not been held. Besides expenditure of individual candidates, political parties have to spend money on election campaigns, publicity, tours, travels and election related establishments. These expenditures run into hundreds of crores. Yet there has not been a transparent funding mechanism of the political system.

The conventional system of political funding is to rely on donations. These donations, big or small, come from a range of sources from political workers, sympathisers, small business people and even large industrialists. The conventional practice of funding the political system was to take donations in cash and undertake these expenditures in cash. The sources are anonymous or pseudonymous. The quantum of money was never disclosed. The present system ensures unclean money coming from unidentifiable sources. It is a wholly non-transparent system. Most political groups seem fairly satisfied with the present arrangement and would not mind this status-quo to continue. The effort, therefore, is to run down any alternative system which is devised to cleanse up the political funding mechanism.

A major step was taken during the first NDA Government led by Shri Atal Bihari Vajpayee. The Income Tax Act was amended to include a provision that donations made to political parties would be treated as expenditure and would thus give a tax advantage to the donor. If the political party disclosed its donations in a prescribed manner, it would also not be liable to pay any tax. A political party was expected to file its returns both with the income-tax authorities and Election Commission. It was hoped that donors would increasingly start donating money by cheque. Some donors did start following this practice but most of them were reluctant to disclose the details of the quantum of donation given to a political party. This was because they feared consequences visiting them from political opponents. The law was further amended during the UPA Government to provide for “pass through” electoral trust so that the donors would park their money with the electoral trusts which in turn would distribute the same to various political parties. Both these reforms taken together resulted in only a small fraction of the donations coming in form of cheques.

In order to make a serious effort to carry forward this reform process, I had announced in my Budget Speech for the year 2017-18 that the existing system would be substantially widened and donations of clean money could be made to political parties in several ways. A donor could enjoy a tax deduction by donating in cheque. Donors were also free to donate moneys online to political parties. A cash donation to a political party could not exceed an amount of Rs.2000/-. In addition, a scheme of electoral bonds was announced to enable clean money and substantial transparency being brought into the system of political funding.

I do believe that donations made online or through cheques remain an ideal method of donating to political parties. However, these have not become very popular in India since they involve disclosure of donor’s identity. However, the electoral bond scheme, which I placed before the Parliament a few days ago, envisages total clean money and substantial transparency coming into the system of political funding. A donor can purchase electoral bonds from a specified bank only by a banking instrument. He would have to disclose in his accounts the amount of political bonds that he has purchased. The life of the bond would be only 15 days. A bond can only be encashed in a pre-declared account of a political party. Every political party in its returns will have to disclose the amount of donations it has received through electoral bonds to the Election Commission. The entire transactions would be through banking instruments. As against a total non-transparency in the present system of cash donations where the donor, the donee, the quantum of donations and the nature of expenditure are all undisclosed, some element of transparency would be introduced in as much as all donors declare in their accounts the amount of bonds that they have purchased and all parties declare the quantum of bonds that they have received. How much each donor has distributed to a political party would be known only to the donor. This is necessary because once this disclosure is made, past experience has shown, donors would not find the scheme attractive and would go back to the less-desirable option of donating by cash. In fact the choice has now to be consciously made between the existing system of substantial cash donations which involves total unclean money and is non-transparent and the new scheme which gives the option to the donors to donate through entirely a transparent method of cheque, online transaction or through electoral bonds. While all three methods involve clean money, the first two are totally transparent and the electoral bonds scheme is a substantial improvement in transparency over the present system of no-transparency.

The Government is willing to consider all suggestions to further strengthen the cleansing of political funding in India. It has to be borne in mind that impractical suggestions will not improve the cash denominated system. They would only consolidate it."

3-Jan-2018: Govt notifies electoral bonds to replace cash donations to political parties

In an attempt to ensure more transparent financing of political parties participating in elections, the government announced the introduction of new electoral bonds that donors can buy from the State Bank of India (SBI). The political parties who get these bonds can in turn encash them only through a designated bank account. The bonds will be available at specified SBI branches for 10 days each in the months of January, April, July and October.

The electoral bonds are aimed at rooting out the current system of largely anonymous cash donations made to political parties which lead to the generation of black money in the economy. The bonds, which would be valid for 15 days, will not carry the donor's name even though the purchaser would have to fulfil KYC norms at the bank. The window will be for 30 days in the year of a general election.

A citizen of India or a body incorporated in India will be eligible to purchase the bond. The electoral bond, which will be a bearer instrument, will not carry the name of the payee and 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.

Finance minister had first announced the concept of electoral bonds while presenting the Budget for 2017-18 on February 1, 2017, to make political funding more transparent. The government has now finalised the scheme for electoral bonds. The scheme will be notified today. Although called a bond, the banking instrument resembling promissory notes will not carry any interest. Electoral bonds will allow donors to pay political parties using banks as an intermediary.

The name of the donor is not disclosed but bonds would get reflected in the balance sheet of the donors. Electoral bonds, can be given to a registered political party which has secured at least 1 per cent vote in the last Lok Sabha or state assembly elections. That party will have to give one bank account to the Election Commission and it will have to be enchased within 15 days.

At present, the donor or quantum and source of funds is not known. The donor will know for which party he is depositing money. The political party will file a return with the election commission. Now, which donor gave to which political party, that is the only thing which will not be known.

Electoral bonds will ensure clean money and significant transparency against the current system of unclean money. The name of the donor is being kept secret, since the past experience has shown that once the names are disclosed, there is a tendency to shift to cash donations. The present system is unclean money and new system is a substantial amount of transparency if not total.

2-Feb-2017: Government introduces alternative funding mechanism for electoral bonds

The government has announced measures in the Budget to bring in greater transparency in funding of political parties. These include capping cash funding by a single anonymous donor to 2000 that is at a tenth of the current limit and proposing electoral bonds that are likely to reveal the identity of the donor while keeping the name of the party hidden.

Both proposals will require amendments to existing laws. While introduction of electoral bonds will need an amendment to the RBI Act, the lowering of limit for anonymous contributions to Rs 2,000 from Rs 20,000 could necessitate an amendment to the Representation of the People Act.