Electoral bonds, the State Bank and the art of evasion
n a landmark judgment on February 15, 2024, a fivejudge Bench of the Supreme Court of India declared the electoral bond scheme unconstitutional. This was a scheme which opened the floodgates of unlimited anonymous funding of political parties and consolidated the role of big money in the Indian political system.
IDirective and response
To give “logical and complete effect” to its ruling, the top court put a stop to the issuance of electoral bonds, and gave the State Bank of India, or the SBI (the bank that was authorised to issue and encash the bonds), 21 days to disclose two sets of information to the Election Commission of India (ECI) to put up on its website. The first was details of the electoral bonds purchased since April 12, 2019, which would “include the date of purchase of each Electoral Bond, the name of the purchaser of the bond and the denomination of the Electoral Bond purchased”. The second was on details of electoral bonds redeemed by political parties for the same time frame. The Court ruled: “SBI must disclose details of each Electoral Bond encashed by political parties which shall include the date of encashment and the denomination of the Electoral Bond”.
Just two days before the expiry of the deadline laid down by the Court, the SBI filed an affidavit recording its inability to decode, compare and disclose the requisite data in the prescribed time period. The bank claimed that to protect donors’ anonymity, details of purchase of bonds and of redemption were decoupled and stored in separate silos, and there was no central database. Further, it stated that some details such as the number of bonds were stored digitally, while others, such as the name of purchaser and KYC details, were stored physically. In order to provide donor information, the date of issue of each bond would have to be checked and matched against the date of purchase by a particular donor. This information would then have to be matched against the bond redemption information — which makes up the second silo. According to the SBI, to rematch them would be a task requiring a significant amount of effort. Therefore, it sought an additional four months to comply with the Court’s directions to submit the information.
The bank’s affidavit
The absurdity of the SBI’s request is best appreciated by examining the submissions made by the bank in its affidavit.
The affidavit states that since April 2019, a total of 22,217 electoral bonds were used to make donations to various political parties. Donor details were kept in a sealed cover at the designated branches of the SBI where the bonds could be transacted, and all such sealed covers were deposited in the main branch of the SBI in Mumbai. Further, at the time of redemption by political parties, the original bonds and the payin slips were stored in a sealed cover and also sent to the Mumbai branch.
Thus, it can be noted that the names of all purchasers of electoral bonds and the details of encashment of all bonds, including the name of the political party redeeming the bond, date and denomination of bond encashed are readily available at a single location, albeit in sealed covers. Further, since the date of issue and denomination of all electoral bonds are digitally recorded, this would also be accessible at the
SBI’s main branch in Mumbai. Surely, opening the sealed covers and matching the information would not be a herculean task!
The claim of the SBI, the largest public sector bank in India, which serves 50 crore customers, that it needs four months to match purchaser and redeemer information for 22,217 electoral bonds is baffling.
It is not surprising, therefore, that the SBI’s noncompliance with the directions of the Supreme Court is fuelling public suspicion that the bank is attempting to evade revealing donor identities before the general election 2024 is held.
The centrality of the voter’s right to know
In its judgment, the Court held that the voter’s right to information includes the right to know financial contributions to a political party because of its influence on electoral politics and on governmental decisions. The Court noted that contributions made by companies are purely business transactions made with the intent of securing benefits in return. That 94% of the electoral bonds, in value terms, were of the denomination of ₹1 crore is an indication of the quantum of corporate funding. The Court ruled that information about sources of political party funding would enable voters to assess if there is a correlation between policy making and financial contributions, and empower people to track quid pro quo.
Once again, it is up to the Supreme Court to call out the SBI’s delaying tactics and uphold the voter’s constitutional right to know under Article 19(1)a. It needs to ensure that the timelines defined in the judgment for disclosing details of electoral bonds are adhered to, and voters are armed with this crucial information when they cast their vote in the general election. The Bench that was led by the Chief Justice of India had noted in its judgment that “information about funding to a political party is essential for a voter to exercise their freedom to vote in an effective manner.”
The voter needs to know the sources of financial contributions to parties well before she casts her vote in the general election