Electoral bonds not a scam, RBI did not raise any concerns: Former Finance Secretary

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Published: November 29, 2019 5:35:11 PM

The central government had notified the electoral bond scheme in 2018. Under the scheme, any individual who wants to donate can buy bonds from the specific branch of SBI and then donate that to a political party.

Electoral bonds, Electoral bonds scam, Electoral bonds rbi, Electoral bonds sc garg, Subhash Chandra Garg on bonds, bonds, bonds scamSC Garg today said that there were no differences between the government and RBI regarding the scheme finally issued.

Former Finance Secretary Subhash Chandra Garg on Friday said that electoral bonds are not a scam as they were introduced to clean up political funding by removing cash donations, which it has done. He said the system of the electoral bond was meant to eliminate large cash donations. “In case, if a political party is still receiving its political donation in cash primarily, then that might actually indicate a scam,” he added.

Garg, however, said that the scheme was not 100 per cent cleansing of the political donation system but it was 70-90 per cent. “How can it (electoral bonds) be a scam when a political contribution is given from white money of a company or from somebody’s bank account after transparently buying it from a bank after KYC?” the former Finance Secretary said.

The central government had notified the electoral bond scheme in 2018. Under the scheme, any individual who wants to donate can buy bonds from the specific branch of SBI and then donate that to a political party. Then the receiving political party can encash that bond through a Bank account with the Authorized Bank. In this case, the donor’s identity is not revealed and transactions are done through banks only.

However, it was feared that since the transactions are allowed only through SBI and every bond has a serial number, the government can — if it wants to — find out who is donating to whom by merely tracking the serial number and encashment. It was also alleged that in such cases, people would hesitate in donating to the opposition parties.

The apprehension is not entirely off the mark as various reports suggest that the Bharatiya Janata Party is the biggest beneficiary of electoral bonds as it has received over 80 per cent donations made through this instrument. The people have been criticising the anonymity shield that it provides to the donors.

The recent debate erupted after it was reported that former RBI Governor Urjit Patel had raised some serious concerns over the introduction of bonds. However, Garg today said that there were no differences between the government and RBI regarding the scheme finally issued. “I do not recall whether RBI raised any objection or expressed any opinion after the Scheme was notified,” he added.

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