Low value poll bonds find no takers

Hyderabad: There are no takers for electoral bonds of lower denomination issued by State Bank of India under the central government’s Electoral Bond Scheme launched on January 2 this year.

The scheme was intended to bring transparency in funding to political parties and check the flow of black money. Individuals/ entities can purchase these bonds and donate to political parties of their choice. The bonds were issued in denominations of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore.

SBI data reveals that 99.9 per cent of the bonds sold were in higher denominations of Rs 10 lakh and Rs 1 crore, indicating that common people were not contributing funds to political parties and funds are flowing from business entities or elite groups.

The sale of bonds of denominations of Rs 1,000, Rs 10,000 and Rs 1 lakh accounted for a mere 3.5 per cent of all the bonds sold while the remaining 96.5 per cent were of Rs 10 lakh and Rs 1 crore respectively.

The scheme has a provision not to disclose the identity of the donor and also the political party, which has received it. Obviously bonds of higher denomination were brought by corporates or business entities or big investors as common people cannot afford to buy such bonds and donate them to parties. In terms of amount, 99.97 per cent of the bonds sold were of Rs 10 lakh and Rs 1 crore.

Only 17 bonds of Rs 1000 denomination and 10 bonds of Rs 1 lakh denomination were sold. Not a single bond of Rs 10,000 denomination was sold. SBI issued bonds in two phases. In the first phase, the scheme was open for nine days in March and April. The bonds were for sale only in four branches in the metro cities of Chennai, Kolkata, Mumbai and New Delhi.

In April, the scheme was extended to seven more branches — Bengaluru, Gandhinagar, Chandi-garh, Bhopal, Jaipur, Lucknow and Jaipur. But the buyers were in Chennai, Kolkata, Mumbai, New Delhi and Bengaluru. Not a single bond was bought in the remaining six branches in other cities. Of the total bonds sold, Mumbai and Kolkata together accounted for the highest sales at 72 per cent.

As many as 520 bonds worth Rs 222 crore were sold in March. In April the demand was even poorer as only 256 bonds of Rs 114.9 crore were sold. Overall, 776 bonds of Rs 336.9 crore were sold in March-April. Kolkata topped with 344 bonds sold, followed by Mumbai at 237, New Delhi 76 and Chennai 62.

Mumbai topped in terms of value of bonds sold at Rs 173 crore, followed by Kolkata (Rs 70 crore), New Delhi (Rs 63 crore) and Chennai (Rs 18 crore). An SBI branch in Bengaluru witnessed sales of Rs 12.90 crore.