Representative image of Indian rupees.
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The Supreme Court had on March 18 directed the SBI Chairman to file an affidavit indicating disclosure of all details of the Electoral Bonds by March 21, 5 pm.
As political parties take potshots at each other, ahead of the Lok Sabha polls, over the ongoing controversy behind electoral bonds, let us understand what they are and why they have been in the news lately.
What are electoral bonds?
As per the Electoral Bond Scheme, 2018, an electoral bond is bond issued in the nature of a promissory note, which shall be bearer in character.
A bearer instrument does not carry the name of buyer or the payee and the holder of the instrument(which are political parties in this case), are presumed to be its owner.
When did electoral bonds come into being?
The scheme regarding these financial instruments that are used for making donations to political parties was first pronounced by Finance Minister Nirmala Sitharaman in the Union Budget 2017-18. It was notified on January 2, 2018.
Who can donate electoral bonds?
The scheme allows citizens of India and domestic companies to donate electoral bonds to the political parties of their choice. The political party has to then redeem them within 15 days. A person can buy these bonds either individually or jointly with others.
What is the upper limit of buying an electoral bond?
These bonds can be issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore and there is no limit on the number of electoral bonds.
What happens if political parties do not redeem these bonds within 15 days?
In case a political party fails to redeem electoral bonds within the stipulated period of fifteen days, the amount gets deposited by the authorised bank to the Prime Minister Relief Fund (PMRF).
What is the criteria to be eligible to receive bonds?
To be eligible to encash electoral bonds, political parties must meet two criteria:
They must be registered under section 29A of the Representation of the People Act, 1951
They must have secured not less than one per cent of the votes polled in the last general elections
What does the Supreme Court have to say about the electoral bonds scheme?
In what came as a landmark verdict, the apex court last month struck down the Electoral Bonds Scheme declaring it "unconstitutional". "We are of the opinion that the information about funding to a political party is essential for a voter to exercise their freedom to vote in an effective manner. The Electoral Bond Scheme and the impugned provisions to the extent that they infringe upon the right to information of the voter by anonymising contributions through electoral bonds are violative of Article 19(1) (a) of the Constitution," the bench said in a unanimous verdict.