Explanation:

Electoral bonds are to be used for donations to political parties. The advantage of the electoral bond system over donations through cheques is that many donors expressed reluctance to use cheques because it becomes transparent and leads to political vendetta by rivals. As per the electoral bond mechanism announced in the Budget, the proposed bonds will resemble a promissory note and not an interest-paying debt instrument. They will be sold by authorised banks and can be deposited in notified accounts of political parties within the duration of their validity. The bonds will not carry the name of the donor and routing of the money through banks will ensure that only tax paid money comes into the political system. The government is planning to go ahead with electoral bonds even if consensus eludes on the issue as political parties have not come up yet with any suggestion on the proposal.