The Supreme Court has delivered a significant verdict on the Electoral Bonds Scheme, declaring it unconstitutional and imposing a ban on its operation.
The Court stated that the Electoral Bonds Scheme violates the right to information and is a breach of Article 19(1)(a). The Chief Justice of India (CJI) emphasized that there are alternative methods to curb black money besides Electoral Bonds.
During the verdict, the CJI highlighted that the secrecy surrounding Electoral Bonds goes against the right to information. Transparency in political party funding enables citizens to exercise their voting rights effectively.
The CJI emphasized that withholding information about political party funding goes against the principle of transparency.
The State Bank of India (SBI) is mandated to disclose information regarding Electoral Bonds purchased from April 12, 2019, onwards.
This information must be provided to the Election Commission (EC) within three weeks. The EC will then share this information publicly. SBI is required to comply with this directive within the stipulated timeframe.
The scheme was notified by the government on January 2, 2018. According to this scheme, Electoral Bonds could be purchased by any citizen of India or a company established in the country.
Any individual could purchase Electoral Bonds either singly or jointly with other individuals. Political parties registered under Section 29A of the Representation of the People Act, 1951, were eligible to accept Electoral Bonds.
The only condition was that they must have received at least one percent of the votes in the previous Lok Sabha or Legislative Assembly elections.
Electoral Bonds could only be encashed by eligible political parties through their authorized bank accounts. The relevant party needed to deposit the bond into their registered bank account within the fortnight of purchase.
If the party failed to do so, the bond would be rendered useless and ineffective, i.e., cancelled.
The Electoral Bonds were introduced in 2018 to enhance transparency in political funding and bring clean money into the system. Individuals, corporates, and organizations could purchase these bonds and donate them to political parties as contributions.
Political parties could then encash these bonds at authorized banks. The State Bank of India was authorized to issue and encash Electoral Bonds at its 29 branches across various cities including New Delhi, Mumbai, Kolkata, Chennai, Gandhinagar, Chandigarh, Patna, Ranchi, Guwahati, Bhopal, Jaipur, and Bengaluru.
The government introduced the Electoral Bond scheme in 2018 to reform the electoral funding system. On January 2, 2018, the then Modi government notified the Electoral Bond Scheme.
The Electoral Bonds were brought in through the Finance Act of 2017. These bonds were issued four times a year in January, April, July, and October.
Customers could purchase these bonds by visiting the bank branch or through the bank's website.