Context: Ahead of assembly elections in five states, the government approved issuance of the 19th tranche of electoral bonds.
Key Points

• Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding. 
• However, Opposition parties have been raising concerns about alleged opaqueness in funding through such bonds.
• "State Bank of India (SBI), in the XIX Phase of sale, has been authorised to issue and encash Electoral Bonds through its 29 Authorized Branches with effect from January 1 to January 10, 2022,".
• The sale of the first batch of electoral bonds took place from March 1-10, 2018. The 18th tranche of bond sale took place from September 1 to September 10, 2021.
• According to provisions of the scheme, electoral bonds can be purchased by a person who is a citizen of India or entities incorporated or established in India. 
• Registered political parties that have secured not less than 1 per cent of the votes polled in the last election of Lok Sabha or legislative assembly are eligible to receive electoral bonds.
• SBI is the only authorised bank to issue such bonds.
• An electoral bond will be valid for 15 days from the date of issue. No payment would be made to any payee political party if the bond is deposited after expiry of the validity period, as per the statement.
• The bond deposited by any eligible political party into its account would be credited on the same day.

Electoral bonds

• An electoral bond is designed to be a bearer instrument like a Promissory Note.
• Aim: To address the problem of anonymous cash donations made to political parties which lead to generation of black money in the economy.
• The electoral bonds were introduced with the Finance Bill (2017).
• The bonds are similar to banknotes that are payable to the bearer on demand and are free of interest.
• The citizen or corporate can then donate the same to any eligible political party of his/her choice.
• Eligibility to purchase the bond: A citizen of India or a body incorporated in India.

Key features of Electoral Bonds

• Can only be encashed by political parties, which had secured at least 1 % of the votes polled in the most recent Lok Sabha or state election.
• Can be purchased for any value in multiples of Rs.1,000, Rs.10,000, Rs.10 lakhs, and Rs.1 crore from State Bank of India (SBI).
• Electoral bonds have a life of 15 days during which they can be used to make donations to registered political parties.
• The electoral bonds are available for purchase for a period of 10 days each in months of January, April, July and October.
• The donor and the party details are available with the bank, but the political party might not be aware of who the donor is (Name of the donor is not mentioned on the bond.