What are Electoral Bonds? Know their importance, uses & drawbacks

Electoral bonds are like promissory notes which can be purchased by any citizen or company from specified banks to help political parties during the election campaigns.

Youth Extra Lens What are Electoral Bonds

Electoral bonds are financial instruments that were introduced in India in 2018 to enhance transparency in political funding. These bonds are like promissory notes which can be purchased by any citizen or company from specified banks. These help the political parties during the election campaigns.


Importance of Electoral Bonds

Electoral bonds play a crucial role in promoting clean political funding in India. Any Indian citizen can buy these bonds after fulfilling the KYC terms and conditions laid by RBI. Within a span of 15 days of issuing the bonds from some branch of SBI, they should be redeemed by a political party. Whosoever donates the bonds, the anonymity of the donor was maintained until now, thus reducing the chances of corruption and influence in politics. Now, on February 15, the Supreme Court has said that the details of the donor should be made public.


Advantages of Electoral Bonds


Ease of Use:

Electoral bonds provide a convenient and secure way for individuals and corporations to donate to political parties and contribute to the leader they want for the nation.



The system of electoral bonds aims to curb black money and promote clean funding practices by ensuring traceability of donations. Also, now since the details will be made public, as per the instructions of Supreme Court, there is more transparency in electoral bonds.


Legal Framework

Electoral bonds are issued under a legal framework, adding regulatory oversight to the process.


Disadvantages of Electoral Bonds


Potential for Corruption

There were statements made that the anonymity would increase the corruption but since that has been laid down, hoping the percentages of corruption would decrease.


Unequal Access

Since large political parties and well established leaders have promoted and marketed themselves well enough to be known to the audience, small political parties and independent candidates may face challenges in accessing electoral bonds as their contacts and reach is comparatively less.


Limited Impact

Undoubtedly, we have reformed the electoral bonds but the question of transparency and corruption still doesn’t fade away and is a very debatable matter.


CJI DY Chandrachud recently stated, “The problem with the scheme is that it provides with selective anonymity. It’s not completely anonymous. It’s not completely confidential qua the State Bank of India. It’s not confidential qua the law enforcement agency.”


Although, our government has been trying to bring reforms in electoral bonds in India for the betterment of the citizens and the political parties, the clearance on whether these reforms will prove beneficial for the citizens or not is still a big question and is a debatable topic.