Programs: Govt approves sale of 21st tranche of electoral bonds

Brajesh Mohan
personBrajesh Mohan
July 05, 2022
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Sale of Electoral Bonds at Authorized Branches of State Bank of India (SBI). The government approved issuance of the 21st tranche of electoral bonds that is open for sale from July 1.State Bank of India (SBI), in the XXI Phase of sale, has been authorized to issue and encash Electoral Bonds through its 29 Authorized Branches (as per list enclosed below) w.e.f. 01.07.2022 to 10.07.2022. Learn What is Electoral Bond Scheme, its Provisions and Issues.

Programs and Policies are importance part of Economics and Social Issue, Agriculture and Rural Development section of RBI Grade B and NABARD Grade A Exam respectively. Covering Government schemes directly from source is very much needed but not easy to do, through this article we are solving this problem for you. Read our Programs and Policies related articles on regular basis to gain knowledge about these schemes for RBI Grade B, NABARD Grade A Exam and even for UPSC Civil Service exams.

Govt approves sale of 21st tranche of electoral bonds

The government approved issuance of the 21st tranche of electoral bonds that is open for sale from July 1.

  • State Bank of India (SBI) has been authorized to issue and encash electoral bonds through its 29 authorized branches with effect from July 1 to July 10.
  • The Electoral Bonds shall be valid for fifteen calendar days from the date of issue and no payment shall be made to any payee Political Party if the Electoral Bond is deposited after expiry of the validity period. 
  • The Electoral Bond deposited by an eligible Political Party in its account shall be credited on the same day.
  • The 20th tranche of bond sales took place from April 1 to April 10, 2022. The sale of the first batch of electoral bonds happened from March 1-10, 2018.
  • Assembly elections are due in Gujarat and Himachal Pradesh later this year. Polls for five states — Uttar Pradesh, Uttarakhand, Punjab, Himachal Pradesh and Goa — concluded in March this year.

What is Electoral Bond Scheme?

The scheme, announced during the 2017 Budget, aims to account the donations made to all major political parties.
  • The government of India notified the Electoral Bonds Scheme in January 2018. Under this scheme, bonds for contributions to political parties can be issued by the State Bank of India, and can be bought by any donor with a Know Your Customer (KYC) compliant account.
What is it?
  • An electoral bond is designed to be a bearer instrument like a Promissory Note — in effect, it will be similar to a bank note that is payable to the bearer on demand and free of interest. It can be purchased by any citizen of India or a body incorporated in India.
  • The bonds will be issued in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore and will be available at specified branches of State Bank of India. They can be bought by the donor with a KYC-compliant account. 
  • Donors can donate the bonds to their party of choice which can then be cashed in via the party's verified account within 15 days.
What are the other conditions?
  • Every party that is registered under section 29A of the Representation of the Peoples Act, 1951 (43 of 1951) and has secured at least one per cent of the votes polled in the most recent Lok Sabha or State election will be allotted a verified account by the Election Commission of India. Electoral bond transactions can be made only via this account.
  • The bonds will be available for purchase for a period of 10 days each in the beginning of every quarter, i.e. in January, April, July and October as specified by the Central Government. 
  • An additional period of 30 days shall be specified by the Central Government in the year of Lok Sabha elections.
  • The State Bank of India (SBI) has been authorized to issue and encash electoral bonds through its select branches.
Benefits of Electoral Bonds

Controversy over electoral bonds

According to the central government, electoral bonds are introduced to ensure that all the donations made to a party would be accounted for in the balance sheets without exposing the donor details to the public. It would keep a tab on the use of black money for funding elections. In the absence of electoral bonds, donors would have no option but to donate by cash after siphoning off money from their businesses.

However, experts are of the view that if the electoral bonds scheme has been introduced to bring about greater transparency, the government must not restrain from allowing details of such donations to be made public. 

Since neither the purchaser of the bond nor the political party receiving the donation is required to disclose the donor’s identity, the shareholders of a corporation will remain unaware of the company’s contribution. Voters, too, will have no idea of how, and through whom, a political party has been funded.

Critics of the scheme argue that since the identity of the donor has been kept anonymous, it could lead to an influx of black money. According to civil rights societies, the concept of donor anonymity threatens the very spirit of democracy. 

The Election Commission had also expressed reservations on electoral bonds and the provision for non-disclosure of contributions as it felt would cast a shadow on transparency and accountability in political funding.


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