Electoral bonds notified

Why it is in news?

• The union government unveiled key features of electoral bonds scheme announced during the 2017 Budget, including their denomination and validity.

What are Electroral Bonds?

• Electoral bonds are essentially bearer bonds that ensure donor anonymity. They are like cash, but with an expiry date. Let’s say company ‘X’ wishes to contribute Rs. 100 crore to political party ‘Y’. It could buy ten electoral bonds of Rs. 10 crore each from bank ‘A’.
• These bonds would carry only a serial number and not the identity of the buyer.X would have these bonds deposited in Y’s designated account with bank ‘B’.
• B would know that this money belongs to Y but it doesn’t record the fact that it has come from X.

Key features of the bonds :

1. Electoral bonds would be a bearer instrument in the nature of a promissory note and an interest-free banking instrument.
2. Electoral bonds can be bought for any value, in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore.
3. An Indian citizen or body incorporated in India will be eligible to purchase the bond.
4. Electoral bonds would have a life of only 15 days during which it can be used for making donation only to 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 a Legislative Assembly
5. Bonds can be bought only after fulfilling all the existing Know Your Customer (KYC) norms and by making payments from a bank account.
6. The bonds will be available for purchase for 10 days each in the months of January, April, July and October.
7. The window would be for an additional 30 days in the year of general election.

(The Hindu, Indian Express)