Electoral bonds are a way for people or companies in India to donate money to political parties through banking channels, while the donor’s identity was kept anonymous in the bond itself. The scheme was later struck down by India’s Supreme Court in February 2024 as unconstitutional, and the court ordered the details of bond transactions to be made public.

How they worked

A donor bought the bond from an authorised bank, then gave it to an eligible political party, which could cash it in through its verified account. Only parties registered under Section 29A of the Representation of the People Act and receiving at least 1% of votes in the last election were eligible to receive them.

Why they were controversial

Supporters said electoral bonds pushed donations through formal banking routes and reduced cash or black-money contributions. Critics argued that anonymity hid who was funding which party, which they said hurt transparency and voters’ right to know.

Current status

The scheme is no longer in effect after the Supreme Court’s 2024 ruling, and banks were told to stop issuing the bonds. The controversy remains a major topic because the published donation data reshaped public debate about political funding in India.

TL;DR: Electoral bonds were anonymous political donation instruments in India, but the Supreme Court ended the scheme in 2024.