Election procedure authenticity is essential in the context of democratic government. It assures that the legitimate functioning of the governing machinery and the right representation of the opinions of the public are maintained. Financing political campaigns as well as parties is one vital component of this integrity. In order to maintain the public’s trust while preventing vested interests from exerting undue influence, political financial transparency is important.
Electoral Bonds: Recent Update
- A dispute concerning the State Bank of India’s (SBI) disclosure of electoral bonds’ “unique serial numbers” was heard by the Supreme Court.
- Every bond issued under the now-cancelled 2018 Electoral Bond program has a distinct serial number, which may help in tracking its issuance, redemption, and buyer.
- The State Bank of India (SBI) provided the electoral panel body with data on bonds after the Supreme Court denied the bank’s request for further time to submit information.
Electoral Bond Eligibility
As per the electoral reforms, an electoral bond may be obtained from authorized State Bank of India (SBI) branches by any Indian national as well as any company or corporation registered in India. It can be bought separately or in combination with other people. Nevertheless, only KYC-compliant accounts may be used to make transactions in order to donate money to political parties.
The following individuals, who have been established in India, are eligible to buy an electoral bond:
- A Hindu Undivided Family (HUF)
- A business
- A company Any other artificial legal person An Association of Persons (AOP) or a Body of Individuals (BOI), whether or not they are incorporated
- Any branch, office, or bureau under the ownership or management of a fictitious judge
Electoral Bonds: How Does it Work?
- Election bonds will be issued by notified banks.
- The donor may go to the banks that have been informed and buy the bonds. The donor may pay with a cheque or an electronic money transfer for these bonds. Consequently, the donors’ identities are kept private.
- These bonds must be given to the donor’s preferred political party.
- These bonds must be deposited by the political party into the account opened with the Election Commission of India (ECI). The party will receive a verified account from the ECI, and this account will be used for all electoral bond transactions.
- Electoral bonds can only be obtained by political parties that are registered according to Section 29A of the Representation of the People Act, 1951, and that have received at least 1% of the votes cast in the previous general election for the Legislative Assembly or House of the People.
Electoral Bonds Limit
- Electoral bonds’ validity period is 15 days after the date of issuance.
Electoral Bonds Benefits
- In order to prevent malpractice, each electoral bond must be redeemed by a bank account that the ECI has declared.
- Electoral bonds serve as a check on political parties that rely solely on public donations, as electoral funding is only granted to registered parties that receive at least 1% of the total votes cast in the general election.
- Electoral bonds guarantee the achievement of the government’s objective of fully digitizing and securing election funds.
- Due to the fact that political parties can redeem electoral bonds through specific bank accounts, improves accountability and transparency.
- Payments for electoral funds are made online, by cheque, or by debit card, which discourages cash transactions and protects donor anonymity.
Finance Act Electoral Bonds: Decided Case
- In the case of Association for Democratic Reforms v Union of India, the Supreme Court ruled that the Electoral Bond Scheme violated voters’ right to knowledge and was therefore unconstitutional.
Political Funding in India: Steps Taken
On January 2, 2018, the government announced the Electoral Bond Scheme in an effort to organize and purify the nation’s Political Party Financing structure.
- Similar to a promissory note, an electoral bond is a bearer document. Any Indian citizen or entity that is formed in India may purchase it in order to give it to the political party of their choosing. The bond does not have the donor’s name on it.
- Donations to political parties registered per Section 29A of the Representation of the People Act, 1951, and who have received at least 1% of the total votes cast in the most recent general election for the House of the People or a Legislative Assembly, may be made with these bonds.
The introduction of electoral bonds was done so in an effort to increase political financial transparency and reduce corruption practices. Donors’ identities are kept anonymous when gifts are processed through bonds, but regulatory bodies keep an eye on the transactions and the issuing banks record them.
Electoral Bonds FAQs
Who can accept electoral bonds?
In order to finance eligible political parties in India, the government launched the Electoral Bond Scheme.
Why do people buy electoral bonds?
The bonds were introduced with the intention of exposing illicit funds and enhancing political fundraising transparency.
What are electoral bonds in simple words?
It is an instrument that performs similarly to both an interest-free banking tool and a promissory note is an electoral bond. After meeting the KYC requirements established by the RBI, any Indian citizen or entity that is registered in India is eligible to purchase these bonds.
What is the issue of electoral bonds?
After being introduced in 2017, Electoral Bonds were a means of financing political parties in India until the Supreme Court declared them unlawful on February 15, 2024.
Is SBI Authorised to issue electoral bonds?
With effect from January 2 to January 11, the State Bank of India (SBI), in the XXX Phase of sale, has been granted permission to issue and encash electoral bonds through its 29 authorized branches.
Are electoral bonds bearer bonds?
An interest-free banking product, an electoral bond would function as a bearer bond similar to a promissory note.
Who purchases electoral bonds?
An interest-free banking product, an electoral bond would function as a bearer instrument similar to a promissory note. The bond may only be purchased by Indian citizens or entities that are incorporated in India.
How many days electoral bonds are valid?
The electoral Bonds are only good for fifteen calendar days after they are issued, and if they are deposited after that time, no money will be given to the political party that is the payee.
Which bank issued electoral bonds in India?
According to the timetable below, the State Bank of India (SBI) has been granted permission to issue and cash Election Bonds through its 29 Authorized Branches in the months of March, April, and May 2019.
Who filed a petition against electoral bonds?
The 2024 Lok Sabha Elections are quickly approaching and are anticipated to take place before June. The Association of Democratic Reforms (ADR), the primary petitioner in the case challenging the Union’s Electoral Bond plan, was also presenting a contempt plea to the court.
What is the Supreme Court’s Judgement on the electoral bond?
The Supreme Court ruled that the Electoral Bond Scheme violated voters’ right to knowledge and was therefore unconstitutional.
Do electoral bonds come under RTI?
Political parties have only given the Election Commission access to the total amount of donations made through electoral bonds in their account statements each financial year, as donor information is not subject to RTI.
Who introduced the electoral bonds in India?
Arun Jaitley was the one who came up with, created, and oversaw the electoral bonds program. The plan also received significant administrative and political support from the bigger government.
With the goal of giving students the best coaching available for law entrance exams including the CLAT, AILET, and various other numerous state judiciary exams, Jyoti Judiciary Coaching, India’s Finest educational Platform, was established. Come enroll now with Jyoti Judiciary!
For any latest news, legal topics, judiciary exams notifications, patterns, etc watch Jyoti Judiciary’s YouTube channel for legal videos for any updates at https://youtube.com/@jyotijudiciarycoaching4852?si=2cwubh9d2A9urwJf