Electoral bonds are a type of financial instrument used for making donations to political parties in India. They were introduced in 2017 as a new political funding mechanism by the Modi government. Here are some key features of electoral bonds:

• Any Indian citizen or organization registered in India can buy these bonds after fulfilling the KYC norms laid down by the RBI.
• Electoral bonds can be procured by a donor solely through the means of cheque or digital payments in various denominations, such as one thousand, ten thousand, one lakh, ten lakh, and one crore from specific branches of the State Bank of India (SBI) .
• Electoral bonds have a life of only 15 days during which they can be used for making donations only to the political parties registered under section 29A of the Representation of the People Act, 1951.
• The political parties receive the electoral bonds issued by the public or corporations. The political parties expect to approach the electoral commission to file returns on the total electoral bonds they have received.
• The electoral bonds will not bear the name of the donor, thus the political party might not be aware of the donors identity.
• Only registered political parties attaining at least 1% of the votes in the general election can receive electoral funding.
• The Electoral Bonds shall be encashed by an eligible Political Party only through a Bank account with the Authorized Bank. State Bank of India has been authorized to issue and encash Electoral Bonds through its 29 Authorized Branches.

The introduction of electoral bonds was aimed at ensuring that all donations made to a party would be accounted for in the balance sheets without exposing the donor details to the public. The government said that electoral bonds would keep a tab on the use of black money for funding elections. However, there have been concerns about the transparency and accountability of the electoral bonds scheme.