It is unclear why the government initially assured the RBI that RBI "alone" will issue electoral bonds as it could not do so under Section 31(3) of RBI Act.
On Tuesday, replying to a question in Rajya Sabha raised by DMK’s Tiruchi Siva about what the Reserve Bank’s “indirect” approval to the issuance of electoral bonds meant, Finance Minister Nirmala Sitharaman said: “RBI, being a stakeholder, was involved in the consultation process and during the consultation process, they had certain questions to ask about the particular platform of issuance as to who is going to issue it and also the proforma with which it is going to be issued. These consultations were recorded, but, at the end of it, as long as the bonds were going to be issued by the State Bank of India, they did not have an objection. So, when said ‘indirectly’, it meant, subject to that”.
However, documents accessed through RTI by transparency activist Anjali Bharadwaj, show that — far from being just “involved in the consultation process” — the government had for the longest time assured the RBI that the central bank “alone” would issue the bonds. However, the RBI could not issue electoral bonds. This was because of the amendment to the RBI Act, which added a new Section 31(3), in February 2017, which allowed the government to authorise only “scheduled banks” to issue electoral bonds.
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