Political funding takes a transparent leap: Political parties redeem Rs 427 crore SBI electoral bonds

In a first towards bringing in transparency in political funding in India, political parties have redeemed electoral bonds worth Rs 427.3 crore, of the total 980 electoral bonds worth Rs 438.30 crore issued by SBI (State Bank of India) in the first three phases of the sale of such bonds.

The electoral bonds, which were introduced in January this year by the government to promote transparency in funding and donation received by political parties, can be encashed by an eligible political party only through their bank accounts with the authorised bank.

As of now, India’s largest PSU bank SBI is the only authorised bank to issue and encash these bonds under the Electoral Bond Scheme, 2018. Electoral bonds are valid for 15 days from the date of issue and therefore if these are deposited after the expiry of the validity period, no payment is made to any payee political party.

The electoral bonds can be bought by any person of India or an entity incorporated or established in India. Any person eligible to purchase electoral bonds can do it either singly or jointly with other individuals.

Only political parties registered under the section 29A of the Representation of the People Act, 1951, and which have secured not less than 1% of the votes polled in the last election of the Lok Sabha or legislative assembly of the state, are eligible to receive electoral bonds.

Unlike regular debt, these electoral bonds are interest-free debt instruments. The bonds can be bought for any value in multiple of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore after fulfilling all the existing KYC norms and by making payments from a bank account.

The bonds do not have the name of the donor or the receiving political party and only carry a unique hidden alphanumeric serial numbers as an in-built security feature.

State Bank of India