New Delhi: In a bid to clean election financing, the government today outlined contours of the new electoral bonds that donors can buy from SBI and said receiving political parties can encash only through a designated bank account.
The electoral bonds, which are being pitched as an alternative to cash donations made to political parties, will be available at specified branches of State Bank of India (SBI) for 10 days each in months of January, April, July and October.
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, Finance Minister Arun Jaitley said in the Lok Sabha while announcing the contours of the scheme.
He had first announced the idea of electoral bonds in his Budget 2017-18 speech made on 1 February 2017, to make political funding more transparent.
“The government has now finalised the scheme of electoral bonds. The scheme will be notified today,” he said.
Although called a bond, the banking instruments resembling promissory note will not carry any interest. The lender will remain the custodian of the donor’s funds until the political parties are paid.
“The donor will know which party he is depositing money. The political party will file return with the election commission. Now, which donor gave to which political party, that is the only thing which will not be known,” he said.
“Electoral bonds will ensure clean money and significant transparency against the current system of unclean money”.
In the Budget for 2017-18, Jaitley had also announced capping cash donation at Rs 2,000 instead of Rs 20,000 and allowed parties to receive digital donations.
Jaitley said 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.
“A citizen of India or a body incorporated in India will be eligible to purchase the bond,” he said.
Only political parties which has secured not less than one per cent of the votes polled in the last general election or an assembly poll would be eligible to receive donations through electoral bonds, Jaitley said.
“Every political party will file before Election Commission return as to how much money has come through electoral bonds,” the minister said.
On why the name of the donor is being kept secret, he said the past experience has shown that once the names are disclosed, there is a tendency to shift to cash donations.