After announcing introduction of electoral bonds in his Budget speech to ensure greater transparency in political funding, Finance Minister Arun Jaitley has said that government will introduce framework on electoral bonds scheme after detailed discussions with the Reserve Bank of India (RBI) and other stakeholder and minor details about scheme will also come out after discussion. Finance Minister further said that Issuance of electoral bonds would ensure that only legitimate, tax paid, accounted money comes into the political system.
After proposing amendment to the RBI Act in Union Budget 2017-18 to enable issuance of electoral bonds, the government will also amend the Representation of People Act to ensure secrecy of the electoral bond buyers and guidelines for the same will come out by March. Jaitley said that the government will discuss with RBI to finalise the issues such as the duration of the Electoral Bonds, and the bank branches that will be involved for the scheme.
Electoral Bond is a financial instrument for making donations to political parties which will resemble a promissory note and not an interest-paying debt instrument, will be sold by authorised banks and can be deposited in notified accounts of political parties within the duration of their validity. So, every political party recognised by the Election Commission will have to notify one account in advance to the Election Commission and bonds can be encashed and redeemed in that one account.