What are Electoral Bonds?

About Electoral Bonds:

• The electoral bond scheme was launched by the Union government in 2018.
• What is it? It is a bearer instrument, like a promissory note that can be bought by any Indian citizen or company incorporated in India.
• The citizen or corporate can then donate the same to any eligible political party of his/her choice.
• The bonds are similar to bank notes that are payable to the bearer on demand and are free of interest.
• An individual or party is allowed to purchase these bonds digitally or through cheque.
• Working:
  • EBs are issued/purchased for any value, in multiples of Rs 1,000, Rs 10,000, Rs 1,00,000, Rs 10,00,000 and Rs 1,00,00,000.
  • The electoral bonds are available for purchase for 10 days at the beginning of every quarter.
  • SBI is the only bank authorized to sell these bonds.
  • Anonymous cash donations were capped at Rs 2,000.
  • EBs have a life of only 15 days during which it can be used for making donations to political parties.
  • Eligibility: Only political parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than 1% of votes polled in the last general election to the House of the People or the Legislative Assembly of the State, are eligible to receive electoral bonds.
  • The bond can be encashed by an eligible political party only through a designated bank account with the authorized bank.
  • The political parties have to disclose the amount to the Election Commission.
  • The electoral bonds will not bear the name of the donor.