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SC to hear plea against sale of electoral bonds

Topics Covered: Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential; citizens charters, transparency & accountability and institutional and other measures.

SC to hear plea against sale of electoral bonds:


Context:

The Supreme Court has agreed to urgently hear a plea by NGO Association for Democratic Reforms to stay the sale of a new set of electoral bonds on April 1, before the Assembly elections in crucial States such as West Bengal and Tamil Nadu.

What’s the issue?

The petitioner pointed out that the Reserve Bank of India (RBI) and the Election Commission had both said that the sale of electoral bonds had become an avenue for shell corporations and entities to park illicit money and even proceeds of bribes with political parties.

What are electoral bonds?

  • Electoral Bond is a financial instrument for making donations to political parties.
  • The bonds are issued in multiples of Rs. 1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh and Rs. 1 crore without any maximum limit.
  • State Bank of India is authorised to issue and encash these bonds, which are valid for fifteen days from the date of issuance.
  • These bonds are redeemable in the designated account of a registered political party.
  • The bonds are available for purchase by any person (who is a citizen of India or incorporated or established in India) for a period of ten days each in the months of January, April, July and October as may be specified by the Central Government.
  • A person being an individual can buy bonds, either singly or jointly with other individuals.
  • Donor’s name is not mentioned on the bond.

InstaLinks:

Prelims Link:

  1. What are electoral bonds?
  2. Eligibility.
  3. Denomination.
  4. Features.
  5. Who can issue these bonds?

Mains Link:

Critically examine the effectiveness of electoral bonds in ensuring transparent political funding and suggest alternatives?

Sources: the Hindu.