RBI did not object to electoral bonds through SBI: FM Nirmala Sitharaman

Finance Minister Nirmala Sitharaman here on Tuesday said the Reserve Bank of India (RBI) didn`t have any objections to the issuance of electoral bonds through the State Bank of India (SBI). Replying to a supplementary during the Question Hour in the Rajya Sabha, the Finance Minister said the RBI being a stakeholder was involved in extensive consultations with the government, starting from the stage of its conceptualisation.

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"During the consultation process, it had questions about the particular platform for its issuance," Sitharaman said. The RBI`s committee of the central board (CCB) at its October 11, 2017 meeting had indirectly agreed to issue of electoral bonds, if it was to be done by the SBI, she added.

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

The reasons for issuing electoral bonds in bearer form were to bring in transparency to funding in the political system, she said.

The Minister said, the RBI suggestion on issuance of electoral bonds in electronic format (Demat) only with the bond holders sharing unique identifier with the political party would have taken away a key feature of the scheme, which was to protect the identity of the donor from the political parties.

Besides, she said physical scrips would help in popularising electoral bonds and cover people of all strata of the society. Small donors might 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 Minister said the government couldn`t access information of anonymous donors because the gazette notification itself clearly said it had to be a matter of confidentiality by the issuing authority.

She said the identity of the donors could only be obtained through a court order or in case of a prosecuting agency or law enforcement agency, charge-sheeting someone.