What are Electoral Bonds? Definitions, MCQs, and FAQs

What are Electoral Bonds? Definitions, MCQs, and FAQs

Understand electoral bonds in India with this comprehensive guide covering definitions, key features, MCQs, and FAQs.

What are Electoral Bonds?

Electoral bonds are financial instruments used in India for making anonymous donations to political parties. They function like interest-free promissory notes. Indian citizens or companies incorporated in India can purchase these bonds from designated State Bank of India (SBI) branches. The purchased bonds can then be donated to eligible political parties, which can redeem them for funds.

Key Features of Electoral Bonds

  • Anonymity: The donor's identity is not revealed to the political party, maintaining anonymity in political funding.
  • Denominations: Available in multiples of ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakhs, and ₹1 crore.
  • Validity: Electoral bonds are valid for 15 days from the date of issue.
  • Eligibility: Only political parties registered under Section 29A of the Representation of the People Act, 1951, and having secured at least 1% of the votes polled in the most recent general election can receive donations through electoral bonds.

MCQs on Electoral Bonds

  1. Which of the following is the primary purpose of electoral bonds?

    • A. Funding election campaigns
    • B. Providing tax benefits to donors
    • C. Reducing corruption in political financing
    • D. Increasing transparency in political donations
  2. Who is eligible to purchase electoral bonds in India?

    • A. Any individual
    • B. Foreign companies
    • C. Indian citizens or companies incorporated in India
    • D. Non-profit organizations
  3. What is the validity period of an electoral bond?

    • A. 30 days
    • B. 15 days
    • C. 60 days
    • D. 90 days
  4. Electoral bonds function similarly to:

    • A. Bank drafts
    • B. Promissory notes
    • C. Bearer certificates
    • D. Government bonds
  5. To be eligible to receive electoral bond donations, a political party must have secured at least what percentage of votes in the recent general elections?

    • A. 5%
    • B. 3%
    • C. 1%
    • D. 10%

FAQs about Electoral Bonds

  • Why were electoral bonds introduced? Electoral bonds were introduced with the aim of improving transparency and reducing black money (unaccounted cash) in political funding.

  • Are electoral bonds controversial? Yes. Critics argue that the anonymity feature of electoral bonds undermines transparency and can increase the influence of corporate donors and special interests in politics.

  • How do I purchase electoral bonds? Electoral bonds can be purchased from authorized branches of the State Bank of India after fulfilling KYC (Know Your Customer) requirements.

  • Can I track the flow of funds donated through electoral bonds? The identity of the donor remains anonymous to the public and even the political party. This limits the ability to track specific donations.


Electoral bonds represent a unique model of political funding with significant implications for transparency and accountability. Understanding their features, purpose, and the surrounding debates is crucial for informed discussions about political financing in India.

Answer Key for MCQs: 1-A, 2-C, 3-B, 4-B, 5-C


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