Govt approves 19th tranche of electoral bonds; sale open from January 1

Why in news?

• Ahead of assembly elections in five states, the government recently approved issuance of the 19th tranche of electoral bonds which will be open for sale from January 1 to 10,2022.

About electoral bonds

• An electoral bond is like a promissory note that can be bought by any Indian citizen or company incorporated in India from select branches of State Bank of India. The citizen or corporate can then donate the same to any eligible political party of his/her choice. The bonds are similar to bank notes that are payable to the bearer on demand and are free of interest. An individual or party will be allowed to purchase these bonds digitally or through cheque.
• The electoral bonds were introduced with the Finance Bill (2017). On January 29, 2018 the Narendra Modi-led NDA government notified the Electoral Bond Scheme 2018.
• The bonds are issued in multiples of Rs 1,000, Rs 10,000, Rs 100,000 and Rs 1 crore (the range of a bond is between Rs 1,000 to Rs 1 crore).
• These are available at some branches of SBI.
• The electoral bond is valid only for fifteen days.
• The electoral bonds will not bear the name of the donor. Thus, the political party might not be aware of the donor’s identity.

When are the bonds available for purchase?

• The electoral bonds are available for purchase for 10 days in the beginning of every quarter. The first 10 days of January, April, July and October has been specified by the government for purchase of electoral bonds. An additional period of 30 days shall be specified by the government in the year of Lok Sabha elections.