The State Bank of India (SBI), country’s largest public sector lender, on Tuesday stated that it will start selling the much talked about electoral bonds from 1 March, 2018. The electoral bonds or bearer banking instruments were announced by the government in order to put a ceiling on political funding and also prevent seeping of black money into election time fundings. The government’s electoral bonds scheme has been introduced for donors to pick up their own political parties.
Finance Minister Arun Jaitley had earlier said any individual who is citizen of India or any entity incorporated in India will be eligible to buy these bonds to fund political parties of their own choices. The SBI has put the list of benefits that these unique bonds will bring along with them. Here:
One, the electoral bonds (EBs) will bring substantial transparency in political donations against the present contributions in the election funding mechanism.
Two, non disclosure of recipients will ensure people are free to donate to any political party of their choice.
Three, how much funding comes and what kind of funding it is, the source of funding and where it will be spent will be known clearly.
Four, the electoral bonds will reinforce the idea of moving away from a cash system towards clean money which cheque system could not achieve.
Five, there will be a gap of 15 days between buying and selling that will ensure they don’t turn into a parallel economy, informs the SBI.
In January this year, finance minister Arun Jaitley had come out with contours or details of these electoral bonds that put a cap on the amount of money that will used by donors for political funding. The bearer instrument will not carry the name of the payee and 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, Jaitley had said in Lok Sabha early this year.
The electoral bonds with a life of only 15 days, during which it can be used for making donation only to registered political parties, can be encashed only through a designated bank account of the receiver. The bonds will be available for purchase for 10 days each in the months of January, April, July and October. The window would be for 30 days in the year of general election.
Although called a bond, they will be interest-free debt instruments that resemble promissory notes where the SBI will be the custodian of the donor’s funds until the political parties are paid, PTI reported early this year. Read full report here.
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