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SBI gets electoral bond scheme moving, even as it is questioned in SC

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The bank has asked the EC for details of parties eligible to receive funds. Finance ministry announces first issue of the scheme will be open from 1-10 March.

New Delhi: Earlier this month, the Supreme Court admitted a plea challenging the Narendra Modi government’s controversial electoral bonds scheme on grounds of lack of transparency.

Despite this, the scheme has started moving. The State Bank of India (SBI), the only bank authorised to issue electoral bonds, has asked the Election Commission of India (EC) for details of political parties eligible to receive funds through the electoral bond route, ThePrint has learnt.

The SBI wrote to the EC last week seeking information on political parties which have polled more than 1 per cent votes in general elections and assembly elections conducted in 2014, 2015-16 and 2016-17.

Meanwhile, the finance ministry Thursday announced that the first issue of the electoral bond scheme for the year will open from 1-10 March. The bonds will be available for purchase at just four SBI branches to start with — in Chennai, Mumbai, Delhi and Kolkata.

What does the scheme say?

SBI’s communication to the EC is in keeping with the Electoral Bond Scheme 2018 notified by the finance ministry in January.

Section 3 of the scheme states: “Only the political parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951), and secured not less than one per cent of the votes polled in the last general election to the House of the People or the Legislative Assembly, as the case may be, shall be eligible to receive the bond.”

As per the scheme, the bond shall be encashed by an eligible political party only through a bank account with the authorised bank.

Any Indian citizen or entity incorporated or established in India can buy bonds, either singly or jointly with other individuals. The bonds are to be issued for purchase for a period of ten days each in the months of January, April, July and October, with an extra thirty days’ time in the year of Lok Sabha elections.

The scheme protects the buyers of electoral bonds with strong confidentiality clauses, saying that the information furnished by the buyer “shall not be disclosed to any authority for any purposes, except when demanded by a competent court or upon registration of criminal case by any law enforcement agency”.

EC’s objections

The electoral bond scheme has also come under considerable criticism, with many arguing that it is against the principles of fair and free elections as it allows anonymous donations to political parties.

The EC had, in a communication to the Law ministry in May 2017, and later, at a meeting called by the finance ministry, flagged serious concerns about the scheme. Anonymity of the donor and enabling even non-profit making companies to buy electoral bonds were two major concerns raised by the EC.

Further, an amendment to the Representation of People’s Act has enabled that any donation received by a political party through an electoral bond is taken out of the ambit of reporting under the ‘contribution report’ prescribed under the Act – a move that the EC had termed as ‘retrograde’.

Some political parties have also opposed the scheme, and the CPI(M) has moved the Supreme Court on it. The apex court has sought the Centre’s response on the petition.

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