The government on Tuesday notified electoral bonds scheme in a bid to clean up election funding mechanism in the country.
Finance Minister Arun Jaitley announced the terms of issuing such bonds in Parliament.
The bonds will be a bearer instrument in the nature of a promissory note and an interest-free banking instrument.
The bonds, announced in the 2017 Budget, will be an alternative to cash donations made to political parties.
They will be issued through select branches of SBI in the denomination of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.
"The new system will ensure clean money and a significant amount of transparency as against the present system of unclean money and no transparency," Jaitley informed Parliament.
The bonds will not carry the name of the payee, their lifespan will be only 15 days and can be bought in the first 10 days of January, April, July and October.
"The purchaser will be allowed to buy electoral bonds only after fulfilling the extant KYC norms. Bonds will have a lifespan of only 15 days," Jaitley said.
The bonds will be available for purchase for a period of 10 days each in the months of January, April, July and October, as may be specified by the government.
An additional period of 30 days shall be specified by the Centre in the year of the General election to the Lok Sabha.
"The element of transparency in the bonds is that the balance sheet of the donors will reflect their purchase. Political parties, while filing returns, will show the extent of donation they have received. Therefore, this will be cleaner money. Today when cash is given, the source of the money is not known, the donor is not known, where it is spent is not known," Jaitley said.
