The finance ministry on Thursday said that State Bank of India, the country’s largest lender, was authorized to issue and encash electoral bonds with effect from October 1 to 10. These could be done at 29 of the bank’s authorized branches.
According to the provisions of the Electoral Bond scheme notified in January this year, these bonds could be purchased by a person who is a citizen of India or an entity incorporated or established in India. An individual can buy electoral bonds either singly or jointly with other individuals. Only the political parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and which secured not less than one percent of the votes polled in the previous Lok Sabha or Assembly election are eligible to receive the electoral bonds.
Electoral bonds will be valid for 15 calendar days from the date of issue and no payment will be made to any payee political party if the bond is deposited after the expiry of the validity period. The bond deposited by an eligible political party in its account is credited on the same day.
An electoral bond is designed to be a bearer instrument like a Promissory Note — in effect, it will be similar to a banknote 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.