Electoral Bonds: Mumbai Contributed Rs490 Crore; Delhi Encashed Rs785 Crore Out of Rs1,213.26 Crore in 19th Phase
Moneylife Digital Team 04 February 2022
Mumbai, India’s financial capital, continues to contribute political funding through electoral bonds (EBs). In contrast, New Delhi, the national capital, encashed the maximum amount through the EB route, shows a reply received under the Right to Information (RTI). The anonymity provided to the donors by EBs makes it the preferred choice for big donors, including corporates.
 
Information obtained by Commodore (Cmde) Lokesh Batra (retd) under RTI shows that during the 19th phase, bonds worth Rs1,213.36 crore were sold through select branches of the State Bank of India (SBI). SBI’s Mumbai branch sold EBs worth Rs489.50 crore, Chennai at Rs227.50 crore and Kolkata at Rs154.48 crore. Hyderabad (Rs126 crore) and New Delhi at Rs117.62 crore are other cities that contributed more than Rs100 crore in the 19th phase of EB sale. 
 
 
On 31 December 2021, the finance ministry announced the sale of EBs ahead of the assembly elections in five states, Uttar Pradesh, Goa, Punjab, Manipur and Uttarakhand. SBI was assigned to issue and encash electoral bonds through its 29 authorised branches from 1st January to 10 January 2022. The EBs are valid for 15 calendar days, and those that remain uncashed are transferred to the Prime Minister’s National Relief Fund (PMNRF).
 
Expecting a good response from the public for its electoral bonds (EBs), the Narendra Modi-led Union government printed bonds worth Rs18,531.50 crore. However, till the 18th phase, bonds worth Rs7,994.98 crore were sold. 
 
During the 19th phase, the New Delhi branch of SBI witnessed encashment of EBs worth Rs784.85 crore, out of the EBs worth Rs1,212.86 crore encashed at SBI. As per the reply received by Cmde Batra, bonds worth Rs40.01 lakh remained uncashed and would be transferred to the PMNRF. 
 
 
In terms of encashment of EBs, New Delhi is followed by Kolkata with Rs224.20 crore and Chennai at Rs100 crore. Mumbai, which contributed maximum in the EB sale during the 19th phase, enchased bonds worth Rs39.20 crore, the RTI reply shows.
 
Until the last window period till 10 January 2022, a total of 2,068 EBs of various denominations were sold. A major portion of them is the highest value denomination of Rs1 crore (1156 bonds) followed by the next highest denomination of Rs10 lakh (536 bonds). A total of 365 bonds of Rs1 lakh denomination were sold in the 19th phase. Meanwhile, the purchases made for the lower denominations of Rs10,000 are only 10 electoral bonds, while just one bond of Rs1,000 denomination was sold.
 
On 2 January 2018, the finance ministry had notified the EB scheme. As per the scheme, an electoral bond is a bond issued like a promissory note. It may be purchased by a person who is a citizen of India or entities incorporated or established in India. The bonds are issued in multiples of Rs1,000, Rs10,000, Rs1 lakh, Rs10 lakh and Rs1 crore.
 
These are available at specified branches of SBI, and any account-holder compliant with know-your-customer (KYC) norms can buy these bonds. Donors can donate the bonds to their party of choice, which can then be encashed by the party’s verified account within 15 days. The bond does not carry the name of the buyer or the payee.
 
The recipient political party does not have to disclose who it has received the bond from in its account. Neither does the donor entity have to state to which party it has donated. Also, as per the scheme, only eligible political parties with a 1% vote share are eligible to buy electoral bonds.
 
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