RBI Had No Objection To Issuance Of Electoral Bonds Via SBI, Says Nirmala Sitharaman
Union Finance Minister Nirmala Sitharaman during the ongoing Winter Session of Parliament, in New Delhi, India, on Dec. 10, 2019. (Photo: PTI)

RBI Had No Objection To Issuance Of Electoral Bonds Via SBI, Says Nirmala Sitharaman

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The Reserve Bank of India had no objection to issuance of electoral bonds through the State Bank of India, Union Finance Minister Nirmala Sitharaman said on Tuesday.

Replying to a supplementary during Question Hour in Rajya Sabha, Sitharaman said that RBI, being a stakeholder, was involved in extensive consultations with the government at the stage of conceptualisation of electoral bonds.

"During the consultation process, they had questions about the particular platform for its issuance as to who is going to issue. And also the pro forma with which it is going to be issued. These consultations were recorded, but at the end of it, as long as the bonds were going to be issued by SBI, they did not have any objection," Sitharaman said.

According to the finance minister, the Committee of the Central Board of the RBI in its meeting held on Oct. 11, 2017, indirectly agreed for electoral bonds to be issued if it is done by SBI. The Bank in the CCB meeting and other internal fora would have discussed the multiple facets of the electoral bonds schemes.

"The CCB supported the bank's stand on not issuing the electoral bonds in scrip form and observed that if the government decides to issue electoral bonds in scrip form through SBI, the bank should let it be,” she said.

The decision for issuing electoral bonds in bearer form was aimed at bringing transparency to political funding, Sitharaman said. The minister said RBI's suggestion on issuance of electoral bonds in electronic (demat) format only with the bond holders sharing unique identifier with the political party may take away a key feature of the scheme, which is to protect the identity of the donor from the political parties.

Besides, she said physical scrips will help in popularising electoral bonds and cover people of all strata of the society. Small donors may not be familiar and comfortable with the digital processing and would like to get a physical bond, she added.

In reply to another supplementary, the finance minister said the government cannot access the information of anonymous donors because the gazette notification itself very clearly says that it has to be a matter of confidentiality by the issuing authority.

She said the identity of the donors can only be obtained through a court order or in case of a prosecuting agency or law enforcement agency which is chargesheeting someone.

Also read: Congress Terms Electoral Bonds ‘Threat To Democracy’, Demands JPC Probe

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