The scheme will help keep check on corruption in the name of political funding, Shah said in a statement after the government outlined contours of the new electoral bonds in Parliament.

The government's decisions to sharply cut the cash donation a political party can receive and to introduce "electoral bonds" had been announced in the union budget this year.

Keeping its promise of cleaning up election funding, the government on Tuesday notified the scheme of electoral bonds.

The bonds will not carry the name of the payee, their lifespan will be only 15 days and can be bought in the first 10 days of January, April, July and October.

Making an unscheduled announcement on the scheme in the Lok Sabha, he said, "The government has now finalised the scheme of electoral bonds". A donor can now buy these bonds from the State Bank of India and give them to political parties which can encash them only through a designated bank account.

Now, an Indian citizen will be eligible for purchasing electoral bond.

Interest-free electoral bonds for political funding can be purchased from SBI for 10 days in January, April, July and October and will be available in multiples of Rs1,000, Rs10,000, Rs1 lakh, Rs10 lakh and Rs1 crore. The lender will remain the custodian of the donor's funds until the political parties are paid. Then, the political party for whom the donor has donated can convert these bonds back into cash via their bank accounts.

In India, political parties accept the cash donations from anonymous sources, and almost 70% of the Rs.11,300 crore in party funding over an 11-year period came from anonymous sources, as per the Association for Democratic Reforms (ADR). Also, The donations through electoral bonds could only go to registered political parties.

The electoral bonds would be valid for 15 days and will not carry any interest. An additional period of 30 days would be specified by the Centre in the year of general elections. The donors will have to make KYC disclosures to SBI.

"The present system is unclean money and new system is a substantial amount of transparency if not total", he added.

"If people have apprehensions, let them suggest a better system".