Why in News ?

Sale of Electoral Bonds at Authorised Branches of State Bank of India (SBI) under Electoral Bonds Scheme. The State Bank of India (SBI), in the XIV Phase of sale, has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches.

What is Electoral Bonds Scheme?

• 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.
  • Issued in multiple values of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.
  • Monies received from electoral bonds will be deposited in a bank account verified by the Election Commission.
  • All the transactions for electoral bonds can be done only through that account.
• 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.
  • The citizen can then donate the same to any eligible political party of his/her choice.
• The sale of the first batch of electoral bonds took place from March 1-10, 2018.

Controversy Regarding Electoral Bond

• Since the identity of the donor of electoral bonds has been kept anonymous, it could lead to an influx of black money.
• The scheme was designed to help big corporate houses donate money without their identity being revealed.
• This affect the transparency and accountability. 

About the News

• Ahead of the Bihar election, the government approved the 14th tranche of electoral bonds which will be open for sale between Oct. 19 to Oct. 28.
• 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.
  • SBI is the only authorised bank to issue such bonds.

Source : PIB

GS II : Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures

Current Affairs Compilation : 17 October 2020