Assembly Elections 2023: What are electoral bonds?

With Tripura, Meghalaya and Nagaland set to vote in a few weeks, political rallies and campaigns are at their peak in these states. Though these parties are raising regional issues in these states, there are certain topics that don't fail to appear in headlines just before the elections.

Electoral Bonds is one such term that does the regular rounds before.

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What is an electoral bond?

An electoral bond is designed to be a bearer instrument like a promissory note, similar to a bank note that is payable to the bearer on demand and free of interest. It is a process for the person (Indian citizen) or a corporate entity to fund a political party.

When and why were they introduced?

Electoral bonds were introduced in 2018. The Narendra Modi-led NDA government notified the scheme through Gazette Notification No. 20 dated January 2, 2018 "to cleanse the system of political funding in the country."

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Introduced to make funding to political parties transparent, electoral bonds allow a political donor to purchase bonds from authorised banks and can be redeemed by parties only through registered accounts in a prescribed time frame.

How can an electoral bond be purchased?

It can be purchased by any citizen of India or a body incorporated in India.

Electoral bonds are available at a designated State Bank of India in respective city branches listed by the government.

People and corporate companies looking to purchase them have to fulfil prerequisites such as KYC (Know Your Customer) with the bank for authentication. The bonds will be issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.

Electoral bonds have a 15-day buffer time during which they can be "used for making a donation only to the political parties registered under section 29A of the Representation of the Peoples 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 a Legislative Assembly."

Electoral bonds can be encashed by an eligible political party only through an account with the authorised bank.

When are electoral bonds available for purchase?

The electoral bonds will be available for purchase at designated SBI branches in the first 10 days of every new quarter-- that is April, July, October, and January.