Encash poll bonds or money goes to Prime Minister's National Relief Fund

The purchaser will have to submit PAN details, but need not require to give KYC details unless the bonds purchased are worth more than Rs 50,000

Electoral bonds, launched by the central government for making anonymous donations to political parties, can be purchased by cheque, demand draft, and electronic transfer from 53 of the more than 24,000 branches of State Bank of India (SBI) in the country, according to a notification.

If political parties fail to encash their bonds within 15 days of the purchase, they may lose the donation to the Prime Minister’s National Relief Fund, the government has said.

The bonds can be purchased by individuals, companies, non-government organisations, trusts, and a group of people without making a public disclosure.

The purchaser will have to submit his or her permanent account number (PAN) details, but need not require to give know-your-customer (KYC) details unless the bonds purchased are worth more than Rs 50,000.

The bonds will not carry the name of the person buying them.

Bonds can be purchased in the capitals of all the states, and Union territories.

However, two branches of SBI each in Andhra Pradesh, Chhattisgarh, Gujarat, Jammu & Kashmir, Karnataka, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, and West Bengal are authorised to sell bonds.

In Uttar Pradesh three additional branches, and in Maharashtra and Telangana two more branches, apart from the ones in their capitals, will sell electoral bonds.

“The information furnished by the buyer shall be treated confidential by the authorised bank and 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,” the notification issued by the Ministry of Finance on January 2 said.

The notification also makes it clear that an application to purchase electoral bonds, which can be made online also, will be rejected if the KYC documents — the voter ID, passport, or Aadhaar — are not submitted by the purchaser under the present Reserve Bank of India policy.

Political parties registered under the Representation of the People Act, 1951, and have secured at least one per cent votes polled in the last Lok Sabha or Assembly elections will be eligible to receive the bond, keeping the new political parties out of its ambit.

The bonds will be an interest-free debt instrument, resembling promissory notes, and can be purchased in the multiples of Rs 1,000, Rs 10,000, Rs 100,000, Rs 1 million, and Rs 10 million. They can be purchased “either singly or jointly with other individuals”.

Finance Minister Arun Jaitley had announced the move to float electoral bonds in the 2017-18 Budget last year.

“The element of transparency is that the balance sheet of donors will reflect that they have bought a certain amount of bonds, and political parties will also file their returns (to the Election Commission) that will reflect the extent of electoral bonds received,” Jaitley had said in the Lok Sabha on Tuesday, while announcing the broad framework of the bonds.

The finance minister had said a large portion of the source of political funding was undisclosed at present because most donations were made in cash. Last year, the government had reduced the limit of cash donations to political parties to Rs 2,000 from Rs 20,000.

According to an analysis by the Association of Democratic Reforms, national and regional parties received Rs 78.33 billion between 2004-05 and 2014-15, with 69 per cent of their income from unknown sources. The analysis showed that 83 per cent income of the Congress and 65 per cent income of the Bharatiya Janata Party came from unknown sources during this period.