Announced in Budget 2017-18, Electoral Bonds are one of the two measures, to bring in greater transparency in funding of political parties.

The other measure being Capping of Cash Transfers. For the purpose of Electoral Bonds, an amendment to the RBI Act, 1934 will be made and for the capping of cash to under Rupees 2,000 for donation to political parties, an amendment in IT Act, 1961 will be required in Section 13A.

• Donors can purchase bonds only through cheque or digital mode, helping to track record of the source of purchase.
• These bonds can be redeemed only in the designated account of a registered political party and within the prescribed time limit from issuance of bond. The identity of the bond bearer as well as the political party would be kept unkown.