RBI Had No Objection to Issuance of Electoral Bonds through SBI, Says FM Nirmala Sitharaman

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday said in Rajya Sabha that the RBI had no objection to issuance of electoral bonds through the State Bank of India (SBI).

Replying to a supplementary during the Question Hour on electoral bonds through the SBI, the Finance Minister said the Reserve Bank of India (RBI) being a stakeholder was involved in extensive consultations with the government at the stage of conceptualisation.

"During the consultation process they had questions about the particular platform for its issuance as to who is going to issue. And also the proforma 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 the SBI, they did not have any objection," Sitharaman said.

She said the Committee of the Central Board (CCB) of RBI in its meeting held on October 11, 2017 indirectly agreed for electoral bonds to be issued if it is done by the SBI.

The Bank in the CCB meeting and other internal fora would have discussed the multiple facets of the Electoral Bonds schemes.

She said the proceedings of CCB mention that "the CCB supported the Bank's stand on not issuing the EBs in scrip form and observed that if the Government decides to issue EB in scrip form through SBI, the Bank should let it be."

The main reasons for issuing EBs in bearer form are to bring in transparency to funding in the political system, she said.

The Minister said RBI's suggestion on issuance of EBs 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 EBs 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 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.