New Delhi: In a significant ruling, the Supreme Court on Thursday invalidated the electoral bonds scheme introduced by the Narendra Modi-led government in 2018. This scheme, aimed at facilitating anonymous funding to political parties, was conceived as an alternative to cash donations, with the intention of enhancing transparency in political funding.

The apex court directed the sole issuing bank, the State Bank Of India (SBI), to cease the issuance of electoral bonds immediately. Furthermore, it issued a series of instructions to the SBI regarding the disclosure of electoral bond details to the Election Commission of India (ECI).

Highlighting that electoral bonds not yet encashed by political parties must be returned to the purchasers, the court specified a validity period of 15 days. Parties failing to encash bonds within this timeframe are required to refund them to the purchaser, with the SBI responsible for reimbursing the amount to the purchaser's bank account.

Electoral bonds, conceived as financial instruments resembling promissory or bearer bonds, were introduced to facilitate financial contributions to political organizations. These bonds, purchasable by Indian citizens or legally constituted entities, ranged in value from Rs 1,000 to Rs 1 crore, with increments in multiples.

Regarding eligibility, Indian nationals and legally established entities operating in India were permitted to purchase these bonds within specified 10-day windows, occurring quarterly in January, April, July, and October.

To claim refunds in accordance with the Supreme Court directive, individuals who purchased electoral bonds in the last 15 days may approach the designated State Bank of India branch where the bonds were acquired. Upon demonstrating that the funds have not been transferred to political parties within the stipulated period, they are entitled to a refund.

Last month, the Ministry of Finance announced that the State Bank of India (SBI) had been authorized to issue and encash electoral bonds through its 29 branches from January 2 to January 11.