EC concerns over laundering delay electoral bonds

NEW DELHI: Concerns of money laundering through electoral bonds are delaying their launch, said sources in the government.

Finance minister Arun Jaitley had proposed the introduction of electoral bonds in Budget 2017, as means of attaining transparency in donations to political parties.

“During its meetings with the RBI, we realised that these bonds could be misused for money laundering. We are working to fix that gap and ensure no misuse,” said an official in finance ministry who did not wish to be named.

The bonds are valid for one month, and the fear is that it could become a means of laundering money as the bond changes hands in 30 days and is finally redeemed.

“After all these are bonds that will be designed by the government and issued by various stateowned banks, we have to ensure that there is no misuse,” said the source quoted above.

The government is confident the concern will addressed soon. The bonds will be available at denominations higher than ₹2,000 at select banks and political parties can redeem them only in designated banks.

These bonds cannot be bought with cash.

The source added the ministry took almost seven months as it required several meetings with the RBI and election commission.

“Views and suggestions from political parties were sought ...” said another finance ministry official. But the Opposition continues to harbour doubts about these bonds.