Tag: sbi electoral bonds

Electoral Bonds Not Encashed By Political Parties Transferred To PM’s National Relief Fund: SBI

The SBI’s affidavit shows that 3,346 electoral bonds were purchased between April 1, 2019 to April 11, 2019 when the bonds were first issued. Only 1609 bonds were redeemed out of 3,346. 

New Delhi: A day after the State Bank of India (SBI) deposited all the details of electoral bonds to the Election Commission of India (ECI), it filed a compliance affidavit in the Supreme Court on Thursday, March 14. The bank revealed that those electoral bonds which were not encashed by the political parties were transferred to the Prime Minister’s National Relief Fund (PMNRF) in accordance with a gazette notification.   

“The amount of electoral bonds which were not encashed by the political party within the validity period of fifteen days during this period have been transferred to the Prime Minister’s National Relief Fund as per the Gazette Notification no 20 dated 02.01.2018,” the SBI mentioned in the affidavit submitted in the court. The affidavit revealed that a total of 22,217 electoral bonds were bought between April 1, 2019 to February 15, 2024, out of which 22,030 were redeemed. 

Notably, the PMNRF website points out that “PMNRF accepts only voluntary donations by individuals and institutions.” 

Also read: SBI’s Deadline for Electoral Bonds Details Ends Today. Here’s Who Received the Most

Filing the affidavit, SBI chairperson Dinesh Kumar Khara said that it had complied with all the directives of the Supreme Court and shared the date of purchase of electoral bonds, the name of the buyer, the denomination of the electoral bond purchased, and details of the political parties which received donations through the bonds. All these four were a secret as per the provisions of the electoral bonds scheme initiated by the Narendra Modi government, until the Supreme Court ruled the scheme as “unconstitutional” this February and asked the SBI to furnish all details. 

Thereafter, the Supreme Court also struck down the SBI’s appeal to seek more time to share all the details, and ordered it to furnish all the details to the ECI by March 12, 2024.

Complying with the order, the SBI on March 11, 2024 submitted two password protected PDF files in a pen drive containing all the details to the ECI. It also shared a separate envelope containing the passwords with the ECI. The apex election body is supposed to publish all these details on March 15, 2024. 

The SBI’s affidavit shows that 3,346 electoral bonds were purchased between April 1, 2019 to April 11, 2019 when the bonds were first issued. Only 1609 bonds were redeemed out of 3,346.  Then, between April 12, 2019 to February 15, 2024, 18, 871 electoral bonds were purchased. In this period, 20,421 electoral bonds were redeemed. 

 

Watch | Electoral Bonds: ‘SC Slaps SBI On Face, Hope It’s a Sign of New Assertiveness’

Justice Madan Lokur tells Karan Thapar in an interview that he does not recall any other case in his years as a Supreme Court and high court judge where a major public sector bank has been so strongly rebuked by a court.

In an interview to discuss the Supreme Court’s Monday order to the State Bank of India on the electoral bonds issue and whether this represents a new assertiveness on the part of the top court, one of the Supreme Court’s most illustrious former judges has said: “It is a slap on the Bank’s face” adding “the Bank has been put in its place”.

Justice Madan Lokur said “the SBI cut a very sorry figure in Court” and it’s “pretty badly embarrassed”. Justice Lokur said he does not recall any other case in his years as a Supreme Court and high court judge where a major public sector bank has been so strongly rebuked by a Court.

Speaking about the manner in which the State Bank of India responded in the Supreme Court on Monday, Justice Lokur said: “at every stage there were problems that the SBI was trying to create.”

In a 25-minute interview to Karan Thapar for The Wire, Justice Lokur was asked if the Supreme Court’s handling of the electoral bond issue, both in February and yesterday (Monday 11), indicates a new assertiveness on the part of the Court and a new firmness in defence of the rights of Indian citizens, and Justice Lokur replied: “Yes, I hope it’s a sign of assertiveness” adding that he would welcome that.

Right at the end of the interview there is also a five-minute discussion – in the light of Justice Lokur’s hope that the Supreme Court is now more assertive – on the issue of whether the Supreme Court should stay the Act passed in December determining how Election Commissioners and Chief Election Commissioners are appointed. This Act has been challenged in Court and the Court has agreed to hear the challenge but as yet no date for the hearing has been fixed. It’s argued that the December Act undermines the independence of the Election Commission. The Supreme Court, in an earlier judgement of last year, had said the ECI’s independence is necessary for the integrity of India’s democracy and the free and fairness of elections. Now, when it seems the government will use that law to appoint new Commissioners, which could have a substantial impact on the independence of the Election Commission as well as the forthcoming elections, should the Supreme Court stay the Act pending hearing the challenge brought against the Act?

I will leave you to watch the interview to hear Justice Lokur’s response to this issue. Let me point out its particularly rich in detail and analysis and very interesting.

In fact, so too is Justice Lokur’s response to all the questions about the points made by the Supreme Court on Monday as well as the responses from SBI lawyer Harish Salve. Once again, I will leave you to see the interview to find out about this.

After FAQs on Electoral Bonds, SBI’s Beneficial Ownership Proformas Disappear from Website

The proformas are those that require details of who is buying the bonds.

The Supreme Court of India refused to grant the State Bank of India extra time to furnish information about the buyers of electoral bonds (EBs) and the political parties that redeemed them. Instead, the court threatened the bank with penal action if it continued to defy its orders, leaving the country’s largest bank facing consequences it deserved.

On its website, SBI proudly proclaims itself as a Fortune 500 company with a rich heritage and legacy of over 200 years, boasting a 25% market share and serving over 480 million customers through a vast network of 22,000-plus branches and more than 65,600 ATMs. However, inexplicably, this public sector banking behemoth adopted the ‘Please miss, my dog ate my homework miss’ style of argument while pleading its inability to comply with the transparency directives of the court.

In February, a five-judge constitution bench of the court reiterated the fundamental right of every voter to know all information that is essential to make an informed choice on the polling day. This right covers details of who gives how much money to which political party, among other information, the court held unanimously.

Rather than burning the midnight oil to collate information on buyers and redeemers of EBs to hand over to the Election Commission of India (ECI) for publication on its website, SBI requested an extension until the end of June, when the Lok Sabha elections would be done and dusted.

Having conducted business with SBI for over a decade as a student, I am left questioning its assertion of being ‘the most trusted bank by Indians through generations,’ especially in light of its excuse that it holds records about buyers and recipients of EBs in separate silos, claiming that matching the information between them is a time-consuming exercise.

Six years ago, noted journalist Poonam Agarwal wrote an investigative piece to discover that every EB of every denomination has a unique identification number printed on it which is visible only under UV light. Is it not commonsensical to make the assumption that this unique number would be recorded against every denomination of EB sold to prospective donors and matched against every EB redeemed by political parties? This is an essential safeguard to prevent fake EBs from entering the system, especially in our country where counterfeiting currency notes, coins and stamp papers is almost like a cottage industry.

One would think, the digitalised banking processes of SBI would make matching of donor and redeemer data as easy as clicking a few buttons to let the computers spit out the nexus. Artificial Intelligence is not required for this exercise at all.

Or did we read much more than what the Supreme Court had specifically recorded as directives to SBI and ECI, towards the end of its February judgment? Was our expectation of being able to discover who donated how much to which political party through the EB route unrealistic? For now, all that we will get to know from SBI through the ECI is, who bought EBs of which denomination and when, and the date and denomination-wise encashment of EBs by political parties.

The Supreme Court directed SBI to disclose only this much in February. Yet, SBI was reluctant to disclose even this information until after the Lok Sabha elections.

What did the Supreme Court say about the voter’s right to know?

SBI’s latest pleadings have actually brought to light a significant element of disconnect between the Supreme Court’s theory about the ‘voters’ right to know’ and the specific directives it gave in February.

The following extracts from the court’s judgment summarise its well-constructed theory regarding the voter’s right to know, based on existing case law:

“Electoral democracy in India is premised on the principle of political equality which the Constitution guarantees in two ways. First, by guaranteeing the principle of “one person one vote” which assures equal representation in voting. The Constitution prescribes two conditions with respect to elections to seats in Parliament which guarantee the principle of “one person one vote” with respect to every voter and amongst every State…”

“Second, the Constitution ensures that socio-economic inequality does not perpetuate political inequality by mandating reservation of seats for Scheduled Castes and Scheduled Tribes in Parliament and State Assemblies…”

“The Constitution guarantees political equality by focusing on the ‘elector’ and the ‘elected’. These two constitutional precepts foster political equality in the following two ways. First, the Constitution mandates that the value of each vote is equal. This guarantee ensures formal political equality where every person’s vote is accorded equal weightage. Second, the Constitution ensures that members of socially marginalized groups are not excluded from the political process. This guarantee ensures (a) equality in representation; and (b) equality in influence over political decisions.”

“However, political inequality continues to persist in spite of the constitutional guarantees. One of the factors which contributes to the inequality is the difference in the ability of persons to influence political decisions because of economic inequality. In a politically equal society, the citizens must have an equal voice to influence the political process. We have already in the preceding section elucidated the close association of money and politics where we explained the influence of money over electoral outcomes. However, the influence of money over electoral politics is not limited to its impact over electoral outcomes. It also spills over to governmental decisions.”

“It must be recalled here that the legal regime in India does not distinguish between campaign funding and electoral funding. The money which is donated to political parties is not used by the political party only for the purposes of electoral campaign. Party donations are also used, for instance, to build offices for the political party and pay party workers. Similarly, the window for contributions is not open for a limited period only prior to the elections. Money can be contributed to political parties throughout the year and the contributed money can be spent by the political party for reasons other than just election campaigning. It is in light of the nexus between economic inequality and political inequality, and the legal regime in India regulating party financing that the essentiality of the information on political financing for an informed voter must be analyzed.”

“Economic inequality leads to differing levels of political engagement because of the deep association between money and politics. At a primary level, political contributions give a “seat at the table” to the contributor. That is, it enhances access to legislators. This access also translates into influence over policy-making. An economically affluent person has a higher ability to make financial contributions to political parties, and there is a legitimate possibility that financial contribution to a political party would lead to quid pro quo arrangements because of the close nexus between money and politics. Quid pro quo arrangements could be in the form of introducing a policy change, or granting a license to the contributor. The money that is contributed could not only influence electoral outcomes but also policies particularly because contributions are not merely limited to the campaign or pre-campaign period. Financial contributions could be made even after a political party or coalition of parties form Government. The possibility of a quid pro quo arrangement in such situations is even higher. Information about political funding would enable a voter to assess if there is a correlation between policy making and financial contributions.”

“For the information on donor contributions to be relevant and essential, it is not necessary that voters have to take the initiative to peruse the list of contributors to find relevant information which would enable them to cast their vote effectively. Electronic and print media would present the information on contributions received by political parties, and the probable link between the contribution and the licenses which were given to the company in an accessible format. The responses to such information by the Government and political parties would go a long way in informing the voter…”

“In view of the above discussion, we are of the opinion that the information about funding to a political party is essential for a voter to exercise their freedom to vote in an effective manner. The Electoral Bond Scheme and the impugned provisions to the extent that they infringe upon the right to information of the voter by anonymizing contributions through electoral bonds are violative of Article 19(1)(a).” (emphasis supplied)

The above extracts taken from the February 2024 judgment make it amply clear that the foundational basis of voters’ right to know is not just the right to freedom of speech and expression guaranteed under Article 19(1)(a) of the Constitution but also the necessity to create a level playing field for all kinds of voters, both haves and have-nots.

Transparency of political party funding is essential to contain, if not completely eliminate the influence of moneybags on policymaking and other decisions of the government. The court did not stop at just that. It went on to compare the various legal modes of contributing funds to political parties in terms of degrees of transparency in the following words:

“When these three methods of political contribution (electronic transfer other than electoral bonds, contribution to Electoral Trust, and Electoral Bonds) are placed on a continuum, transfer through electronic means (other than electoral bonds) would be placed on one end and Electoral Bonds would be placed on the other end. A voter would receive complete information about contributions made above twenty thousand to a political party in the case of electronic transfer made directly to a political party other than through electoral bonds.

With respect to contributions through electoral bonds, the voter would not receive any information about financial contributions in terms of Section 29C of RPA as amended by the Finance Act…” (emphasis supplied)

So, the minimum standard of transparency that the apex court adopted in the course of its theorisation of voters’ right to know is “complete information about contributions made above twenty thousand [Rs 20,000] to a political party”. This is not all. While striking down the amendment that was made to the Companies Act, 2013 in order to facilitate anonymous donations to political parties by corporate entities, the court observed as follows:

“This Court in the interim order dated 31 October 2023 in the specific context of contributions made by companies through electoral bonds prima facie observed the voter would be able to secure information about the funding by matching the information of the aggregate sum contributed by the Company (as required to be disclosed under Section 182(3) of the Companies Act as amended by the Finance Act) with the information disclosed by the political party. However, on a detailed analysis of the Scheme and the amendments we are of the opinion that such an exercise would not reveal the particulars of the donations because the Company under the provisions of Section 182 and the political party are only required to disclose the consolidated amount contributed and received through Electoral Bonds respectively. The particulars about the political party to which the contributions were made which is crucial to the right to information of political funding cannot be identified through the matching exercise….” (emphasis supplied)

The above extract makes it abundantly clear that the court intended for voters to have complete information about contributions, enabling them to match donors with the political parties that receive donations from corporates. There is no indication in the theorization that the court intended otherwise for contributions made by individuals through EBs. However, the directives issued by the court at the end of its judgment fall woefully short of these two standards – namely, providing “complete information about contributions made above twenty thousand to a political party” and enabling voters, through complete transparency, to “match the donor with the political party.”

The court’s relevant directives for our discussion are reproduced below:

“In view of our discussion above, the following directions are issued:

  1. The issuing bank shall herewith stop the issuance of Electoral Bonds;
  2. SBI shall submit details of the Electoral Bonds purchased since the interim order of this Court dated 12 April 2019 till date to the ECI. The details shall 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;
  3. SBI shall submit the details of political parties which have received contributions through Electoral Bonds since the interim order of this Court dated 12 April 2019 till date to the ECI. 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;
  4. SBI shall submit the above information to the ECI within three weeks from the date of this judgment, that is, by 6 March 2024;
  5. The ECI shall publish the information shared by the SBI on its official website within one week of the receipt of the information, that is, by 13 March 2024;…” (emphasis supplied)

The above directions, in fact, call for the disclosure of donor and recipient information separately, leaving voters with no mechanism to match the two categories of information. This omission prevents voters or the media from analysing and reporting on who paid how much to which political party through the EB route. It is respectfully submitted that this represents a shortcoming in the court’s directives when compared with the standards it set for the “voters’ right to know” in its theorization of that principle.

What other information is likely to be black-boxed by SBI?

Nowhere in the February 2024 judgment is there a listing or even a cursory mention of the kinds of information that SBI collected while selling EBs.

The EB Scheme, which the Union finance ministry’s Department of Economic Affairs notified in the official gazette contained only one proforma, namely, the application form which a prospective donor was required to fill up while buying EBs.

In the course of the implementation of the EB Scheme, SBI collected much more information than the name, address, telephone/fax/email of the applicant. For example, in the case of individual donors, applicants were required to fill out a form that provided details of the “Controlling Person” or “Beneficial Owner” on whose behalf the EBs were being purchased from SBI. (see Images 1 to 3 below).

Image 1: Controlling Person/Beneficial Ownership Proforma issued by SBI for individual EB buyers

Image 2: Controlling Person/Beneficial Ownership Proforma issued by SBI for individual EB buyers

Image 3: Controlling Person/Beneficial Ownership Proforma issued by SBI for individual EB buyers

This form was designed to capture details of the person who remained in the shadows but actually shelled out the money for buying EBs through the applicant. Apart from the usual KYC details that people fill up at banks ordinarily, this form asked about the citizenship status, marital status, residential status, occupation type, names of family members including mother, father and spouse, and tax residency status of the Controlling Person or Beneficial Owner on whose behalf the EBs were being purchased. A photograph of such person was also required to be affixed on this form.

So, what kind of anonymity did the government promise donors through the EB mechanism when SBI was collecting photographs of beneficial owners?

Similarly, SBI collected Beneficial Ownership details of the corporate entity on behalf of which EBs were bought by the applicant who signed the application form (see Images 4 and 5 below)

Image 4: Beneficial Ownership Proforma issued by SBI for corporate buyers of EBs

Image 5: Beneficial Ownership Proforma issued by SBI for corporate buyers of EBs

None of these forms or categories of information that SBI planned to collect find a mention in the February 2024 judgment. Did SBI collect all this information? This question wasn’t raised during the court proceedings. If SBI indeed collected all this information, it must be made public in accordance with the court’s standard of providing “complete information” to enable the voter to make an informed choice at the polling booth.

Conclusion

Much like the EB-related FAQs which disappeared from SBI’s website as reported by the media recently, these proformas have also disappeared from its website.

However, as I had downloaded them contemporaneously in order to file multiple RTI interventions (most of which failed, thanks to the manner in which the Central Information Commission decided the second appeals), these forms can now be displayed publicly.

As of now, all these filled-up forms are black-boxed. We do not know how soon SBI might destroy them. If hundreds of citizens were to file RTI applications seeking this information from every SBI branch that sold EBs, there is a good chance they might be preserved because destroying information that is subject of a pending RTI application attracts a penalty of up to Rs 25,000.

I plan to file my RTIs soon, don’t you want to do so, as well?

Venkatesh Nayak is director, Commonwealth Human Rights Initiative, New Delhi. All facts are in the public domain. Views are personal.

Now, SBI Deletes Documents Related To Electoral Bonds From Website

The document titled “Operating guidelines for donors” listed basic information like who could purchase an electoral bond, electoral bonds were available in what denominations, what were the documents required to purchase electoral bonds, etc.

New Delhi: The State Bank of India (SBI) has deleted electoral bond-related documents from its website. This development surfaces amidst the bank seeking time till June 30 to submit details of electoral bonds encashed by political parties.

The links or webpages which don’t exist in the SBI’s website are — Operating guidelines for donors and Frequently Asked Questions/FAQs.

The document titled “Operating guidelines for donors” was a gazette notification which was released on January 2, 2018. It listed basic information like who could purchase an electoral bond, electoral bonds were available in what denominations, what were the documents required to purchase electoral bonds, how to purchase (through NEFT, online transaction, etc.) and which are the SBI branches authorised for the purchase of the bonds.

In the FAQs, SBI had provided basic information related to electoral bonds like KYC requirements and citizenship proof required for the purchase of bonds, etc. The deleted documents were shared by senior journalist Nitin Sethi on social media platform X (previously called Twitter) and another social media user @indian_nagrik.

Also read: When the Govt Wanted Electoral Bonds Data, SBI Didn’t Need Extra Time to Provide it

Notably, the Supreme Court had ordered the largest government-owned bank to release details of all the electoral bonds purchased by March 6. In total, including the latest tranche, Rs 16,518.11 crore electoral bonds have been sold by the SBI.

According to a report published in The Reporter’s Collective, the SBI has provided crucial data related to electoral bonds to the Modi government and the finance ministry, in particular, sometimes even within 48 hours which makes it difficult to buy the bank’s argument that it will take months for it to match the buyer of the bonds with beneficiary parties.

For instance, the documents accessed by The Reporter’s Collective suggests that the SBI collected data on electoral bonds from across the country within 48 hours after the deadline to encash the bonds ended and provided the information to the finance ministry. The report added that the bank shared such information religiously with the ministry after every window period of sale. The independent media platform has verified such missives being sent up to 2020.

Interestingly, the report pointed out that electoral bond-related work  – from printing to redemption – was overseen by a specific team of the SBI which was earlier called Transaction Banking Unit (TBU). This team collated information for the government at a short notice and kept the finance ministry officials informed about the trends in electoral bonds.

Election Commission Quiet on SBI Missing SC-Mandated Deadline for Information on Electoral Bonds

The latest to take issue with the SBI for its seeking an extension till end-June for providing data on electoral bonds is the Bank Employees Federation of India, which wants the state bank to adhere to the deadline set by the apex court.

New Delhi: A spokesperson for the Election Commission has said it has “no information or comments to offer” on whether the State Bank of India (SBI) has adhered to the Supreme Court’s March 6 deadline for giving it information regarding electoral bonds purchased and encashed since 2019.

There is no word on if the Election Commission has approached the SBI for information. 

The Election Commission, the finance ministry and the law ministry have been quiet about the Supreme Court order declaring electoral bonds to be “unconstitutional”.

The SBI on Monday (March 5) had moved the apex court seeking time till June 30 to disclose details of all electoral bonds purchased or of those encashed by political parties, earning ire and disbelief about India’s largest public sector bank not having information about crores of rupees processed by it going into political parties.

The latest to sharply criticise the SBI is the bank employees’ trade union, Bank Employees Federation of India (BEFI), which said the state bank should adhere to the deadline set by the Supreme Court.

The BEFI consists of employees of commercial banks, the Reserve Bank of India, NABARD, regional rural banks and co-operative banks. The union said that public sector banks and their personnel are being utilised for the “narrow political interest of the ruling forces”.

It issued a scathing response regarding the reasons the SBI gave while asking for an extension from the Supreme Court. 

“The reason attributed by [India’s] largest bank, [the] SBI … that some of the data are stored in physical form kept in sealed covers surprised many in the digital era, especially in [the] banking sector, when most of the information are available with [the] click of a mouse,” the union said in its statement issued from Kolkata and signed by its secretary S. Hari Rao.

It also said, “of late, it is observed that public sector banks and its personnel are utilised for [the] narrow political interest of the ruling forces, like in the cases of observance of Partition Horrors Remembrance Day, Viksit Bharat Sankalp Yatra etc.”

“We express our strong opposition to such activities when the need of the hour is more recruitment in the banking industry and putting a halt to looting of public money through various means.”

Terming the Supreme Court’s verdict on electoral bonds a ‘landmark’ judgment, the union said, “The country observed that [the] SBI after 17 days since the judgement, moved an appeal to Supreme Court on March 4, 2024, just two days before the deadline March 6, 2024, seeking time up to June 30, 2024, to comply with the direction of the court by which time the ensuing general elections will be over.”

Former Supreme Court judge Justice Deepak Gupta, who was part of a bench in 2019 that ordered the SBI to keep records of electoral bonds, told The Wire earlier this week he did not believe the reason the SBI gave while asking for extra time.

“Once the Court had directed that you keep this information it was their bounden duty to keep it in such a manner that when a Court asks them to disclose it they should disclose it as early as possible. Not that they take months to disclose it,” he said.

The BEFI’s statement is reproduced below:

§

6 March 2024

Press Statement issued by General Secretary, B.E.F.I. at Kolkata on SBI seeking time to disclose details of electoral bonds

The honourable Supreme Court of India, in its landmark unanimous judgement on 15th February 2024 declared the electoral bonds scheme, which provided blanket anonymity to political donors, as unconstitutional and manifestly arbitrary. It also struck down the legal amendments allowing rich corporations to make unlimited political donations for favours.

The Supreme Court directed State Bank of India, sole banker to handle electoral bond through only 29 designated branches, to submit full details of contributions and encashment since April 2019 to Election Commission of India within three weeks before 6th March 2024 and ECI to publish the details submitted by SBI in its website before 13th March 2024.

The country observed that SBI after 17 days since the judgement, moved an appeal to Supreme Court on 4th March 2024, just two days before the deadline 6th March 2024, seeking time upto 30th June 2024 to comply with the direction of the court by which time the ensuing General Elections will be over. The reason attributed by the India’s largest Bank SBI is that some of the data are stored in physical form kept in sealed covers surprised many in the digital era especially in banking sector when most of the information are available with click of a mouse.

Of late, it is observed that public sector banks and its personnel are utilised for narrow political interest of the ruling forces, like in the cases of observance of Partition Horrors Remembrance Day, Viksit Bharat Sankalp Yatra etc. We express our strong opposition to such activities when need of the hour is more recruitment in the banking industry and put halt to looting of public money through various means.

Bank Employees Federation of India unequivocally opposes utilisation of banks for political purposes and demands that State Bank of India as a Public Sector Bank should disclose and submit all the details of electoral bonds to Election Commission before the stipulated deadline of 6th March 2024 as directed by the Supreme Court since delayed justice is denial of justice. The matter is pending before the apex court and we believe that the Supreme Court will take appropriate decision in this regard.

Hari Rao S.

Secretary

In December 2022, Electoral Bonds Worth Rs 232 Crore Were Sold

RTI data supplied by the State Bank of India showed that while Mumbai was the most popular destination to purchase the bonds, Delhi continues to remain the city where a significant majority are redeemed.

New Delhi: In the December 2022 window, electoral bonds worth Rs 232.10 crore were sold, according to the Indian Express. Right to Information (RTI) applications filed by the newspaper showed that while Mumbai was the most popular destination to purchase the bonds, Delhi continues to remain the city where a significant majority are redeemed.

Data provided by the SBI – the only bank authorised to sell electoral bonds – regarding the 24th tranche of sales showed that 260 electoral bonds were sold between December 5 to December 12, 2022, according to IE. The sale of the bonds began on the day when the people of Gujarat voted in the second (and final) phase of the assembly election.

Bonds worth Rs 114 crore (nearly 50%) were sold in Mumbai, followed by Hyderabad (Rs 56 crore) and Chennai (Rs 30 crore). In the New Delhi and Kolkata branches, bonds worth Rs 16.10 crore and Rs 16 crore respectively were sold.

According to the newspaper, Delhi remains the top choice for political parties to redeem the bonds – Rs 194.10 crore (83%) of the Rs 232 crore that was sold were encashed at SBI’s New Delhi branch. “The remaining electoral bonds were redeemed in Hyderabad (Rs 21 crore) and Kolkata (Rs 17 crore),” IE said.

Since the scheme began in 2018, SBI has sold 20,734 electoral bonds that were worth Rs 11,699.83 crore, the bank said in response to the RTI application. Among all the tranches, the most bonds were purchased in Mumbai (Rs 3,163.57 crore), followed by Kolkata (Rs 2,408.71 crore), Hyderabad (Rs 2,030.35 crore) and New Delhi (Rs 1,760.94 crore). In Delhi alone, bonds worth Rs 7,603.33 crore were encashed, the newspaper reported.

Also Read | Union Govt Never Sought Concurrence, Merely Informed EC About Electoral Bond Scheme Amendment: RTI

Until the 22nd tranche, electoral bonds were sold for a period of ten days each in the months of January, April, July and October, with the provision for an additional period of thirty days in the years when Lok Sabha elections are held. However, just ahead of the Gujarat assembly election, the Union government amended the scheme to add another 15 days of sales in the years when elections to assemblies are held. The 23rd tranche of sales, between November 9 to November 15, 2022, was the first under the amended scheme.

The RTI data accessed by the Indian Express was for the 24th tranche, sold in December.

An electoral bond is valid for 15 days from the date of issuance. No payment would be made to any political party if the bond is deposited after the expiry of the validity period. The opaque bonds can be purchased by Indian citizens or entities incorporated or established in the country.

Registered political parties which have secured not less than 1% of the votes polled in the last Lok Sabha or legislative assembly election are eligible to receive funding through electoral bonds, which the government claims bring transparency in political funding but critics say has the opposite effect.

Electoral Bonds: ‘No Public Interest’ in Revealing Details of Political Donors, Says Top RTI Body

While dismissing an appeal, the statutory body also held that revealing the details of donors would violate the provisions of the Right to Information Act.

New Delhi: In a significant ruling, the Central Information Commission has held that disclosing the identities of the electoral bond scheme donors is not in the public interest.

The statutory body for the implementation for the RTI Act also held that revealing the details of donors would violate the provisions of the Right to Information Act, the Indian Express reported.

While dismissing an appeal by Maharashtra-based activist Vihar Durve, who had sought information about scheme donors, the information commissioner Suresh Chandra said that “there appears to be no larger public interest overriding the right of privacy of the donors and donees concerned”.

The information commissioner further held that the “disclosure of names of donors and the donees may be in contravention of provisions contained in section 8 (1) (e) ( j ) of the RTI Act itself, which exempt a public authority to give a citizen information available to a person in his fiduciary relationship, unless the competent authority is satisfied that the larger public interest warrant the disclosure of such information”.

The activist said that the CIC order was as an “unreasoned” one as it does not mention objections by the Election Commission, Reserve Bank of India or law ministry.

The electoral bonds scheme was notified by the Centre on January 2, 2018, to purportedly regulate unaccounted money flowing into the political system and to improve financial transparency. Under the scheme, citizens and corporations can buy anonymous bonds or monetary instruments from the State Bank of India (SBI) and donate them to a political party, who can then redeem them for money.

Also read: ‘Corruption-Free India’ Under BJP Government Is Just a Sham

The Central Information Commission in January had directed the Centre to reveal the names of electoral bond scheme donors who wanted their identities to remain confidential.

Durve, the activist in the case, had first sought information in this regard from SBI’s central public information officer on June 16, 2018. He then appealed to the First Appellate Authority (FAA) with the bank, after he was dissatisfied by the CPIO’s reply who also ruled that the “information related to electoral bonds issued to political parties was held by the SBI in fiduciary capacity” and that the names of the donors could not be disclosed as these fell in the bracket of third party information.

While sharing information on the total number of bonds issued in the 2018-20 period, the FAA also had similar observations to make over his refusal to share party-wise details of beneficiaries.

Transparency activists have lamented that the electoral bonds scheme is opaque, potentially promotes the circulation of black money and have expressed disappointment over the Supreme Court’s decision to not grant an interim stay on the electoral bonds scheme.

The use of big money was evident most recently in the Bihar assembly elections when a Right to Information query revealed that a total of 279 bonds of Rs 1 crore were sold during the sale period from October 19 to 28.

Ahead of the Delhi assembly elections, 139 electoral bonds worth Rs 81.67 crore were sold by the SBI, an RTI query revealed.

The Election Commission has previously criticised the electoral bond scheme, coupled with the Narendra Modi government’s decision to remove caps on the extent of corporate funding, by saying it would have “serious repercussions/impact on the transparency aspect of political finance/funding of political parties”.

Similarly, the Reserve Bank of India had also raised concerns about the electoral bond scheme in bearer form having the potential to increase black money circulation, money laundering, cross-border counterfeiting and forgery, which were ignored by the Centre.

Also read: Electoral Bond Scheme Results in Visible Dip in Transparent Corporate Donations

A reply filed in response to an RTI application in May 2020 revealed that electoral bonds worth Rs 19,000 crore had been printed. Of these, bonds worth more than Rs 6,200 crore have been sold in 13 phases altogether.

As per the response to an application filed under the Right to Information Act (RTI), electoral bonds worth Rs 19,000 crore have been printed so far. Of these, bonds worth more than Rs 6,200 crore have been sold in 13 phases altogether.

Electoral Bonds Worth Rs 81.67 Crore Sold Before Delhi Elections

Details about which party received how much funding are yet unknown.

New Delhi: Ahead of the Delhi assembly elections, 139 electoral bonds worth Rs 81.67 crore were sold by the SBI, an RTI query filed by Commodore (Retd) Lokesh Batra has revealed.

Between January 13 to 22, in the 13th phase of sales of electoral bond sales, the largest number (43) were sold by the Kolkata branch and a majority (89) of the bonds were encashed at the New Delhi branch, the RTI response reveals, according to The Hindu.

The newspaper reported that 78 bonds sold were of the denomination of Rs 1 crore while 34 bonds worth Rs 10 lakh each were also issued. “The remaining 27 bonds were worth Rs 1 lakh each. No bonds were issued in the lower denominations of Rs 1,000 and Rs 10,000. All bonds sold were redeemed,” the report says.

The electoral bonds scheme has been criticised by civil society groups, saying it hinders transparency in political funding. As The Wire has previously reported, the opaque mechanism, where the identity of donors remains secret, has become the preferred route for corporate houses and individuals who are making large-sized donations to political parties.

The scheme has also been accused of indirectly helping the party in power. As per the audit reports submitted by the political parties for 2017-18, 95% of the electoral bonds purchased in 2017-18 went to the BJP.

Also Read: Electoral Bonds: Here’s What the Numbers Say

The Association for Democratic Reforms (ADR), an NGO, has filed a petition in the Supreme Court against the scheme. During the last hearing on January 20, lawyer Prashant Bhushan, appearing for ADR, said the scheme “is a means for channelising unaccounted black money in favour of the ruling party”.

The top court refused to grant an interim stay, but sought responses from the Centre and the Election Commission.

Over the past few months, multiple reports have shown that the Narendra Modi government pushed through the electoral bonds scheme despite serious doubts and disagreements from the Reserve Bank of India and Election Commission. RTI queries also revealed that the government did not follow its own rules and regulations while implementing the scheme.

Electoral Bonds: Here’s What the Numbers Say

To know which parties benefitted from electoral bonds, we may have to wait till October 2020 or more, by when political parties are supposed to submit their audit reports for 2019-2020.

More than Rs 6,000 crore worth of electoral bonds have been sold in 12 cycles so far. As many as 55% of these bonds were sold in 2019-20. To know which parties benefitted from electoral bonds, we may have to wait till October 2020 or more, by when political parties are supposed to submit their audit reports for 2019-20.

The electoral bonds scheme was notified by the Central government on January 2, 2018, after the initial announcement during the 2017-18 Budget. One of the main reasons cited for the introduction of the electoral bond scheme was to have control on unaccounted money flowing into the political system and to improve financial transparency.

Factly had earlier published an explainer about the specifics of electoral bonds. Over the nearly two-year period since the introduction of these bonds, there were multiple debates and ongoing discussions regarding the effectiveness of electoral bonds in bringing in transparency and the scope of them being misused as options for introducing non-traceable money into the political system.

Also read: Electoral Bonds Worth Over Rs 3,600 Crore Sold in March, April 2019: RTI Response

While the debate ensues, here is a comprehensive analysis of the numbers related to electoral bonds since their inception. Factly has filed multiple RTIs and the following analysis is based on the information received from State Bank of India (SBI).

Most electoral bonds was sold in April 2019

Since March 1, 2019 till date, there were 12 windows open for the purchase of electoral bonds across various branches of SBI in different cities.  The 9th phase and the 8th phase were during April 2019 and March 2019 and had the longest window period with 20 days and 15 days respectively.

The highest value of electoral bonds sold was during the 9th phase i.e. April 1 – April 20, 2019. A total of Rs 2,256.4 crores worth of electoral bonds were sold during this phase. The next highest was the earlier phase i.e. 8th phase between March 1 – March 15, 2019, when bonds worth Rs 1365.7 crores were sold.

Significantly in the 10th phase, which was for a shorter duration of only five days between May 6 and May 10, 2019, the third-highest amount of electoral bonds were sold, of Rs 822. 25 crores.

It needs to be noted that all these three phases were during the period of 2019 Lok Sabha elections. Hence a total of Rs 4,444.32 crores worth electoral bonds were purchased during these three phases, during the general elections. In other words, close to 73% of the electoral bonds by value were sold in just these three phases.

amount of Electoral Bonds purchase_by phase

55% of the electoral bonds were sold in 2019-20

So far, a total of Rs 3,355.93 crores worth of electoral bonds were sold in the current financial year of 2019-20. This is higher than the whole of the previous financial year which was Rs 2,550.78 crores. For the financial year 2017-18, which had only one phase i.e. the first phase during March 2018 has recorded purchases worth Rs 220 crores.

amount of Electoral Bonds purchase_value of Bonds purchased by Financial Year

99.7% of the bonds purchased by value are of Rs 1 crore & Rs 10 lakh denominations

The electoral bonds are available in denominations of Rs 1,000, Rs 10,000, Rs, 1,00,000, Rs 10,00,000 and Rs 1,00,00,000. Until the latest window period (October 2019), a total of 12, 313 electoral bonds of various denominations were purchased.

A major portion of them is the highest value denomination of Rs 1 crore (5,624 bonds) followed by the next highest denomination of Rs 10 lakh (4,877 bonds). A total of 1,695 bonds of Rs 1 lakh denomination were sold in these 12 cycles. Meanwhile, the purchases made for the lower denominations of one thousand and ten thousand are only 47 and 70 electoral bonds respectively.

amount of Electoral Bonds purchase_number of Electoral Bonds by denomination

While the electoral bonds with the highest denomination of Rs 1 crore form 45.68% of the total number of electoral bonds, their value makes up for 91.76% of the total worth. This is exceedingly high compared to the value of other denominations with the value of Rs 10 lakh denominations amounting to 7.95% and Rs 1 lakh denominations being only 0.27 %. The share of the lower denominations in the total value is negligible.

The higher value of the bonds being purchased indicates that the electoral bonds are being purchased by corporates rather than individuals, although there could be certain exceptions.

amount of Electoral Bonds purchase_Percentage of Electoral Bonds by denomination

Most of the bonds were purchased from Mumbai followed by Kolkata and New Delhi

Electoral bonds were sold through SBI branches spread across 29 cities in India. The SBI branch in Mumbai witnessed the highest purchase of electoral bonds worth of Rs 1879.96 crores. The second highest value of bonds is purchased from Kolkata with Rs 1,440.33 crores followed by the national capital of New Delhi with Rs 918.58 crores.

However, when it comes to the number of bonds purchased, Kolkata tops with 3,478 electoral bonds purchased followed by Mumbai with 2899. The cities of Hyderabad and Bhubaneswar, whose respective states have also had assembly elections during the last 18 months recorded the fourth and fifth-highest value of electoral bonds purchased.

amount of Electoral Bonds purchase_Percentage of Electoral Bonds by City

Nearly 80.5% of the electoral bonds were redeemed in New Delhi

While purchasing the electoral bonds is one side of the coin, the other side is redeeming them. Out of the approximate Rs 6,128.72 crores worth of electoral bonds that were purchased, 99.67% of them i.e. approximately Rs 6108.47 crores were redeemed by the political parties.

In terms of the number of bonds, 12,173 out of 12,313 electoral bonds were redeemed. The political parties are required to redeem an electoral bond within 15 days. Else, the amount would be transferred to PMNRF (Prime Minister’s National Relief Fund). Approximately Rs 20.25 crores have been transferred to PMNRF due to the non-redeemed bonds so far. Nearly half of it i.e. Rs 10 crores relate to bonds purchased during third phase i.e. May 2018 while 74 of the 140 non-redeemed bonds belonged to the 9th phase.

Also read: The Jurisprudence of the Fait Accompli

While Mumbai and Kolkata are the cities where the highest amount of electoral bonds were purchased, it is New Delhi where the largest share of the purchased bonds were redeemed. The total value of electoral bonds redeemed in New Delhi is Rs 4,917.51 crores which make up to nearly 80.5% of the total amount. A total of 8,903 out of 12,313 bonds were redeemed in New Delhi.

The second-highest amount of electoral bonds were redeemed in Hyderabad amounting to Rs 512.3 crores from 1,255 bonds. It is followed by Bhubaneswar with Rs 2,36.5 crores from 484 bonds.  Although the value of bonds redeemed in Mumbai and Kolkata are lesser than Bhubaneswar the number of bonds is higher with 553 and 713 respectively.

As per the guidelines of the scheme, no political party can have more than one current account in SBI for the redemption of these bonds. So, it is natural that the national parties maintain such a current account in Delhi while the regional parties in the respective state capitals. This could mean that the national parties are the principal beneficiaries of this scheme cornering a high share of these bonds.

amount of Electoral Bonds purchase_Value of Electoral Bonds redeemed

Audit reports submitted by political parties the only source for information on beneficiaries of electoral bonds

While the information received from SBI regarding the redemption of the bonds provides data on the value of bonds redeemed and the city from where they have been redeemed, it does not divulge information about the political parties or the beneficiaries of these bonds.

The only source of information to find out the quantum of electoral bonds redeemed by a political party is the annual audit report submitted by the party to the Election Commission of India (ECI). The annual audit report is supposed to be submitted by October 30 every year for the preceding financial year.

However as on today, not more than half of the political parties have submitted their annual audit report for 2018-19. BJP and INC, the two largest national parties are yet to submit their audit reports for 2018-19.

Who is benefitting from these bonds?

As noted earlier, a correlation can be made with the city where the bonds are redeemed and the political party since parties are required to redeem the electoral bonds only through a single bank account.

With New Delhi being the city with the highest amount of bonds redeemed, the national parties could be considered the principal beneficiaries of the bonds. The data from audit reports of 2017-18, corroborates this.

As per the audit reports submitted by the political parties for 2017-18, 95% of the electoral bonds purchased in 2017-18 went to the BJP.

Also read: BJP Knew Details of Electoral Bond Scheme Even Before the Final Draft Stage

The correlation between the city of redemption and the political party is strengthened by the quantum of bonds redeemed in Hyderabad and Bhubaneswar. Substantial amount of bonds was redeemed in both these cities. Odisha along with Andhra Pradesh and Telangana had assembly general elections during the last one year. As expected, the principal regional parties in these states like BJD, TRS and YSRCP are among the parties that declared substantial donations through electoral bonds in 2018-19. These three parties together declared an income of more than Rs 450 crores through electoral bonds in 2018-19.

We will not know the details of beneficiaries of 55% of the bonds until October 2020

The total income through electoral bonds as declared by the political parties who have submitted their audit reports for 2018-19 amounts to Rs 599.07 crores which is only 23.5% of the total electoral bonds purchased in 2018-19. In other words, the two national parties together could have cornered more than 70% worth of the bonds in 2018-19.

As per the data analysed earlier in the story, purchases made during April 2019 and May 2019 are among the highest, amounting to approximately Rs 3,078.62 crores. The beneficiaries of which we would only be able to know when the political parties submit their audit reports for 2019-20, in the later half of next year. In other words, the details of beneficiaries for electoral bonds worth more than Rs 3,300 crores will only be known in October 2020.

Delayed reporting serves no purpose

As of November 2019, nearly 76.5% of the electoral bonds purchased during 2018-19, cannot be traced to any specific political party. The delay & non-compliance by political parties defeats the purpose of any such reporting.

For any holistic analysis about the extent of funds received by political parties for the 2019 Lok Sabha general elections, one has to wait till October 2020, provided the political parties submit audit reports on time. This is because a significant portion of election bonds (73% of the worth till date) were purchased during March 2019, April 2019 and May 2019. Thus, any analysis has to wait till the submission of audit reports for 2019-20.  However, as per the trends highlighted by us earlier, most of the political parties, especially the BJP & INC are not known for on-time submission of the audit reports.

This delay hampers any meaningful analysis of political party funding. The non-disclosure clause (anonymity) attached with the Electoral bonds scheme prevents disclosure of any information regarding the beneficiaries through RTI. The only way out is for the rules to be revised that mandate political parties to submit a report on electoral bonds received within a stipulated cut-off date post-election.

This article was originally published in Factly and has been republished on a Creative Commons (CC BY 4.0) licence. 

Congress Protests Over Electoral Bonds at Parliament Premises

The issue of electoral bonds has snowballed following reports that the RBI and the EC’s reservations were overruled by the Centre.

New Delhi: The Congress on Friday stepped up its attack on the Centre over the issue of electoral bonds, alleging that the government is a “factory of lies” and demanded that Prime Minister Narendra Modi break his silence.

Several senior Congress leaders, including a leader of opposition in Rajya Sabha Ghulam Nabi Azad, Congress’s leader in the Lok Sabha Adhir Ranjan Chowdhury, Anand Sharma, Shashi Tharoor and Manish Tewari, protested against the government inside the Parliament House premises.

Also read: Centre Ignored EC Concerns Too While Pushing for Bearer Electoral Bonds

The issue of electoral bonds has snowballed into a political flashpoint following reports that the Reserve Bank of India and the Election Commission had reservations against them, but were overruled by the Modi government.

Congress’s chief spokesperson Randeep Surjewala, in a tweet, cited a media report that claimed that the government made SBI accept expired electoral bonds sold in an illegal window, and alleged that the government was a “factory of lies”.