How SBI’s Swift Electoral Bonds Service To Govt Contrasts Its Ability To Perform SC-Mandated TaskThe State Bank of India (SBI) has requested the Supreme Court for an extension until June 30 to furnish details regarding electoral bonds. While SBI appears to be moving slowly in disclosing the identities of those who anonymously contributed to political parties, citing the task’s complexity, it’s noteworthy that the bank has previously demonstrated remarkable efficiency in responding to similar government inquiries.
Following the Supreme Court’s decision to cancel the controversial fundraising scheme granting anonymity to political party donors, and its directive to SBI, the issuing entity of the bonds, to reveal donor information, the bank informed the court that it would require several months to correlate bond purchasers with beneficiary parties. However, in a collection of documents disclosed by transparency activist Commodore Lokesh Batra to The Reporters Collective, forming the basis of investigative reports on electoral bonds in 2019 and 2020, numerous pieces of evidence indicate that SBI swiftly provided electoral bond data to the government, sometimes within a mere 48-hour timeframe.
These documents reveal that, at the request of the Union Finance Ministry, the SBI efficiently compiled electoral bond data nationwide within 48 hours of the bond encashment deadline expiration, consistently forwarding this information to the ministry after each sales window. The Collective has corroborated such communications extending up to 2020.
The SBI meticulously maintains an audit trail of bond sales and redemptions by political parties, utilising serial numbers assigned to each bond. When the electoral bond scheme was introduced by the Union government in 2018, the bank insisted on implementing a serial number system.
Despite its prior efficiency in providing electoral bond data to the Union government, the SBI has now informed the court that information regarding bond donors is segregated from data pertaining to recipient political parties. The bank claims that sales data from branches and redemption data from designated branches are submitted separately in sealed envelopes to its Mumbai headquarters, asserting that this segregation is crucial for maintaining anonymity. Consequently, the SBI anticipates it will require months to correlate the buyers of the 22,217 electoral bonds issued since 2019 with their respective beneficiary parties.
However, documents reveal that as early as 2017, the Union Finance Ministry internally acknowledged SBI’s capability to connect donors with recipient political parties in real-time when electoral bonds are encashed, irrespective of whether the transactions occurred electronically or in physical form. This was made possible through rigorous Know Your Customer (KYC) procedures conducted by SBI branches for each bond purchaser and the inclusion of hidden serial numbers on the bonds.
The government, in its defense before the Supreme Court against allegations of fostering an opaque political funding mechanism, asserts that the electoral bond scheme was designed to ensure transparency through validated Know Your Customer (KYC) procedures and an audit trail. Internally, the finance ministry discussed strategies to uphold the scheme’s integrity in court, noting: “The records of the purchaser are always available in the banking channel and may be retrieved as and when required by enforcement agencies.”
The SBI’s plea to the Supreme Court for additional time has sparked a flurry of memes lampooning the bank for exhibiting the same sluggishness it’s accused of in customer dealings. However, this characterisation doesn’t always hold true. There have been instances where SBI demonstrated remarkable responsiveness, particularly in collating information for the government on short notice, with decisions being made swiftly through a mere phone call.
For instance, in 2018, when a political party sought to redeem expired bonds from SBI’s New Delhi branch, the branch promptly notified the Transaction Banking Unit at the corporate office in Mumbai, facilitating quick action within hours. This specific unit oversees the lifecycle of electoral bonds, formerly known as TBU, and has been instrumental in providing timely data to the government and keeping finance ministry officials informed of electoral bond trends.
Given that electoral bonds were mandated by law to have a shelf life of only 15 days, the SBI corporate office sought guidance from the finance ministry when faced with this situation. The ministry promptly advised the bank to allow the political party to encash the expired bonds, prompting swift action within 24 hours, enabling the party to redeem the bonds.
While official records do not explicitly mention the recipient political party, SBI was aware of the party’s identity and informed the finance ministry accordingly, detailing the specific expired bonds and their purchase dates in Delhi.
Despite being formally an independent entity, SBI has often acted as an extension of the government. In 2018, it sought permission from the finance ministry to disclose bond data under the Right to Information Act, further blurring the lines between the bank and government interests.
This history raises doubts about the rationale behind the delay in providing the details requested by the Supreme Court. Former government official Subhash Chandra Garg, who oversaw the electoral bonds scheme during his tenure, labeled the plea as “the lamest excuse.” He emphasised that reconciling data between bond buyers and recipients should require minimal time, given the unique serial numbers assigned to each bond.
Garg oversaw the inclusion of hidden serial numbers on electoral bonds, as per SBI’s request. His remarks hint at a potential motive behind SBI’s application, suggesting that the bank may have been influenced to delay disclosure.