Electoral bonds: RBI didn’t stop SBI role, says Nirmala Sitharaman

Nirmala Sitharaman. File photo: PTI  

Finance Minister Nirmala Sitharaman informed the Rajya Sabha on Tuesday that the Reserve Bank of India (RBI) had not objected to the 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 that being a stakeholder, the RBI was involved in extensive consultations with the government at the stage of conceptualisation.

“RBI, being a stakeholder, was involved in the consultation process and during the consultation process, they had certain questions to ask about the particular platform of issuance as to who is going to issue it 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 an objection. So, when said ‘indirectly’, it meant, subject to that,” Ms. Sitharaman said.

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

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

She said the proceedings of the CCB mentioned that “the CCB supported the bank’s [RBI’s] stand on not issuing the EBs in scrip form, and observed that if the government decides to issue EB in scrip form through the SBI, the bank [RBI] 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 the RBI’s suggestion on issuance of EBs in electronic (Demat) format only with the bond holders sharing a 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 would help in popularising EBs and cover people of all strata of society.

Small donors may not be familiar and comfortable with the digital processing and would like to get a physical bond.

In reply to another supplementary, the Minister said the government could not access the information of anonymous donors because the gazette notification clearly says that it had to be a matter of confidentiality by the issuing authority.

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Printable version | Oct 26, 2020 4:46:04 AM |

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