Does the Court realise: Electoral bond donors known only to SBI, ED, IT dept; not political parties?

Only SBI and the Central govt agencies know both buyers and recipients of EBs. Yet the Supreme Court nor the Election Commission asked them; they asked the parties!

Representative image of a man standing thoughtfully in front of an SBI branch with the 'State Bank of India' logo visible (photo: Getty Images)
Representative image of a man standing thoughtfully in front of an SBI branch with the 'State Bank of India' logo visible (photo: Getty Images)

AJ Prabal

Speaking from the US on 24 November 2023, Commodore Lokesh Batra (rtd) could scarcely contain his bewilderment. Why did the Supreme Court ask the Election Commission of India to get the details of electoral bond donors from political parties, he wondered aloud.

“At least the ECI knows very well that details of donors are accessible only to the State Bank of India and central agencies like the income tax dpeartment and Enforcement Directorate, and not to political parties,” he said.

Yet the Election Commission, as directed by the Supreme Court on 2 November, sought the 'detailed particulars of the donors against each bond received' by them until 30 September 2023 from the political parties.

It followed up with reminders, telling the political parties that they must furnish the information in a ‘sealed cover’ to the Commission by 15 November so as to enable the Commission to furnish the particulars to the court by 19 November, as tasked.

“It is impossible, legally and technically, for political parties to provide details of donors,” Batra pointed out wryly.

On 21 November, he filed yet another RTI application to the Election Commission, seeking details of the particulars submitted by the parties. It's long been his habit to look into this matter.

He also pointed out the anomaly in the response filed by the Election Commission in compliance with the Supreme Court order of 12 April 2019, when it submitted a list of 105 political parties that claimed to have received electoral bonds. For, in an RTI reply, the State Bank of India had informed the commodore that only 25 political parties have even opened the special accounts in the designated SBI branches for deposition of the EBs received.

A Constitution bench of the Supreme Court, headed by Chief Justice D.Y. Chandrachud, has reserved its judgement on the petitions challenging the validity of the anonymous bonds, which are like promissory currency notes.

The apex court was informed during the hearing that the Union government had set aside the Reserve Bank of India’s reservations and noted its submission that only the central bank could issue currency or promissory notes. The government cast off the RBI's objection by holding that it would defeat the purpose of the scheme for the RBI to issue the bonds, because its objective was to keep the identity of the donors a secret.

The Union government’s distrust of the RBI, which had also insisted on issuing electoral bonds in a ‘demat’ (electronic) format, and its implicit trust in the SBI, controlled by itself, did not escape the notice of the court either.

The justices did observe that the anonymity of the bonds seemed selectively enabled, so that while the government had the means to learn the identity of the donors, the parties in the Opposition remained in the dark.

Given this context, it is even more puzzling to find the Court seeking details of donors from political parties, pointed out Batra. The Election Commission, he believes, should have gone back to the Court and drawn the Court’s attention to this trifling detail—that the parties could not know!

The Supreme Court could have directed the SBI to furnish the details instead.

Details of SBI's sales of electoral bonds as received via RTI by Commodore (Retd) Lokesh Batra
Details of SBI's sales of electoral bonds as received via RTI by Commodore (Retd) Lokesh Batra
Commodore (Retd) Lokesh Batra

Not only do select branches of the State Bank of India sell the electoral bonds, but—as noted above—the recipient parties are also required to open special bank accounts with the SBI to deposit these bonds that they may be the beneficiaries to.

While electoral bonds can be purchased by cheque or demand draft, the SBI’s records reflect the identity of the buyer either way. What is more, each bond has a hidden number (invisible to the naked eye) that confirms the authenticity of the bond document.

With KYC (Know Your Customer) norms in place, SBI would have all the necessary details to identify every donor, pointed out Batra. "Since each bond is like a promissory note carrying no name, the SBI will know the name of the political party which encashed the bond through the secret number that each bond carries," he said.

Political parties are therefore certain to respond to the Election Commission by saying that they have no idea who the donors are; that the bonds were physically handed over to them only by anonymous messengers.

Batra, who has singlehandedly unearthed file notings from the finance ministry, communications between the ministry and the RBI, and records of sales of electoral bonds from the SBI in the past, besides eliciting information from the Election Commission under the RTI, feels frustrated at this turn of events.

The record of sales furnished by the State Bank of India shows that in all likelihood, only a handful of corporate bodies may have bought all the electoral bonds in circulation, Batra pointed out.

With virtually 94 per cent of the bonds sold being priced at Rs 1 crore each, the number of buyers could be in double digits and not even in three digits, he suspects.

From 2018 to October 2023, electoral bonds worth Rs 14,940 crore in all have been sold by the SBI. If 94 per cent of them were in denominations of Rs 1 crore each, it means that the country’s politics and political parties are possibly being controlled by just a handful of entities — which is why it is important for people to know the identity of the donors!

While the country anxiously awaits the Supreme Court’s verdict on the validity of electoral bonds as an instrument of funding, Batra is more anxious about the nature of the response that the Election Commission of India may already have submitted to the Supreme Court.

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