The Association for Democratic Reforms (ADR) on Friday moved the Supreme Court seeking a stay on the Electoral Bond Scheme, 2018. In an application, the ADR referred to alleged objections raised by the Reserve Bank of India (RBI) to the scheme.
The plea said documents obtained under the Right to Information (RTI) Act showed that the “Reserve Bank of India gave repeated warnings to the government against the electoral bond scheme stating that it has the potential to increase black money circulation, money laundering, cross-border counterfeiting and forgery.”
In a letter dated January 30, the RBI raised concerns regarding the proposed amendment to the RBI Act for enabling Scheduled Banks to issue Electoral Bearer Bonds, but the concerns “were summarily dismissed by the Finance Ministry”, the petition said.
“The RBI again raised concerns… highlighting that globally, there are hardly any precedents in recent times for issuance of bearer bonds and recommended safeguards to minimise misuse…” it said, adding that then RBI Governor Urijit Patel too had conveyed his reservations on two occasions to the government.
“Not only were the objections raised by the RBI disregarded, but even the suggestions made to make the scheme less vulnerable to fraud were ignored. The only suggestion which was accepted was regarding restricting the validity of these electoral bearer bonds to 15 days,” it said. ADR and NGO Common Cause had moved the Supreme Court in September 2017 against the Scheme.