SBI Faces Supreme Court Order Over Electoral Bond Data Disclosure: Deadline Set for Tomorrow Evening
The Supreme Court heard the State Bank of India’s (SBI) plea to provide information regarding electoral bonds on Monday in a related matter, which was resolved in about 40 minutes. SBI informed the court that they have no issues providing the bond-related information but they need some time. Chief Justice of India (CJI) Dipak Misra asked, “What have you done from the last hearing (February 15) until now, within 26 days?”
After about 40 minutes of hearing, the constitutional bench of five judges of the Supreme Court said that SBI will disclose all information by March 12. They ordered that all information be segregated and published on their website by 5 p.m. on March 15.
The Supreme Court notified SBI’s chairman and managing director to file an affidavit stating that the bank will comply with the orders issued. The Supreme Court stated that they haven’t issued any contempt but they are issuing a notice to SBI, stating that if they fail to comply with today’s orders within the stipulated time, they can face legal consequences.
In reality, on February 15, the constitutional bench of five judges of the Supreme Court had imposed a ban on the sale of electoral bonds. Furthermore, on April 12, 2019, a directive was issued to provide information regarding the electoral bonds purchased until March 6 to the Election Commission.
On March 4, SBI had filed a plea in the Supreme Court and demanded time until June 30 to provide the information. Apart from this, the Court will also hear a plea by the Association for Democratic Reforms (ADR), which demands action against SBI for not providing information by March 6, alleging contempt against SBI.
SBI Releases Statements Regarding Electoral Bonds; Chief Justice Issues Directives
SBI: Senior Counsel Salvie Stated, “I Have Come Via State Bank. We Need a Little More Time to Fulfill Your Orders. SBI Has Suspended Issuing Electoral Bonds.”
SBI: “We Are Facing an Issue, Attempting to Reverse the Entire Process. The SOP Was Designed So that the Name of the Bond Purchaser Should Not Be Present in Our Core Banking System. It Was Decided to Keep it Confidential.”
CJI: “Look at Your Application. You’re Saying that the Data Should Be Sealed in the Relevant Branch. All Sealed Data Should Be Deposited at the Main Branch in Mumbai, and on the Other Hand, Donations Can Be Received from 29 Authorized Banks.”
CJI: “You Say that Data from Both Donors and Political Parties is to Be Sent to the Mumbai Branch. This Means Two Types of Information. You Say that This Process Requires Time. We Haven’t Discussed Matching the Data in Our Orders. We’ve Discussed Making the Information Public.”
SBI: “When Bonds Are Purchased, We Share Information.”
CJI: “But Finally, All Information Comes to the Main Branch in Mumbai.”
SBI: “Only Bond Numbers Are Publicized. Bond Numbers Are Only Used for Subsequent Purchases. Therefore, This is Done so That Discussions About Who Purchased Bonds Don’t Arise.”
CJI: “Your FAQ Also States That Separate KYC Is Required for Each Purchase. This Means that KYC is Required Whenever Someone Buys Electoral Bonds.”
Justice Khanna: “You Say that All Information is Sealed. You Will Only Provide Information by Opening the Seal.”
SBI: “Who Has Purchased Bonds, Full Information is Available. Its Location is Known. The Other Information is Which Political Party has Cashed the Bonds. This Is Not a Problem.”
CJI: “We Issued a Deadline on February 15th. It’s March 11th Today. In the Last 26 Days, What Progress Have You Made? There’s No Mention. You Need to Provide Information. You Were Supposed to Provide Clarity.”
SBI: “We Can Provide an Affidavit. But We Cannot Forget the Excitement to Provide Information about Numbers. That’s the Problem.”
CJI: “We Have Given Instructions to the Election Commission of India to Make Information Public. Salve, You Also Need to Follow These Orders.”
SBI: “The Same Person Who is Responsible for This Will Provide It. Please Give Us Some Time; We Will Do It. If Beneficiaries of Bond Purchases and Donations Have Not Gained Any Benefit, We Will Provide Everything Within 3 Weeks.”
Justice Gavai: “Why Do You Need 3 Weeks?”
Justice Khanna: “Information Regarding Donations Has Already Been Provided Earlier by Political Parties. Information on Bond Buyers is Also Available.”
Court Ordered: Nearly 40 Minutes Later, the Court Began Writing Its Decision. The Court Ordered SBI to Provide Information Regarding Electoral Bonds by March 12th. Earlier, the Petition Requested an Extension Until June 30th. Apart from That, the Election Commission Was Ordered to Compile All Information by March 15th at 5 PM and Publish it on the Website.
2 Petitions Filed in Supreme Court, Both Sides Present Evidence
SBI’s Appeal – More Time Needed to Compile Information. The court had directed SBI to provide information to the election panel by March 6. However, SBI filed a petition in the Supreme Court on March 4. It stated that more time is needed to prepare details.
ADR’s Argument – Delay by SBI in Providing Unique Bond Number, Why? ADR had filed a petition against the State Bank of India (SBI) in the Supreme Court on March 7 for contempt. ADR stated that SBI’s demand for more time questions the transparency of the process. SBI’s IT system can handle this easily. Each bond has a unique number, which can be used to generate reports for the election panel.
When is the Election Bond Hearing in Supreme Court?
February 15, 2024: The Supreme Court immediately stayed the electoral bond scheme for political funding. The court said – this scheme is unconstitutional. Maintaining the secrecy of bonds is undemocratic. This scheme violates the right to information.
November 1, 2023: Regarding the electoral bond scheme, the Supreme Court reserved its decision. It was not announced when the next election will be held. The court directed that the data received from parties should not be disclosed to the election panel. The panel must provide information about the funds received through election bonds to the parties by September 30.
November 1, 2023: Solicitor General Tushar Mehta stated that transparency is maintained through electoral bonds. Donors do not want other parties to know about their donations. Thus, their dissatisfaction will not increase. The court asked – if this is the case, how does the ruling party receive information about opposition donations? Why can’t the opposition get information about donations?
October 31, 2023: Prashant Bhushan withdrew evidence. He said that this bond only influences the government’s decisions. If citizens have the right to know about candidates, their assets, their criminal history, then they should also know who is funding the elections.
What is an Electoral Bond?
In the 2017 budget, then Finance Minister Arun Jaitley introduced the Electoral Bond Scheme. The central government notified it on January 2, 2018. It is a type of promissory note. It is also called a bank note. Any Indian citizen or company can buy it.
If you want to buy it, you can get it at the designated branch of the State Bank of India. The buyer can donate this bond to the preferred party. Only that party should be eligible for this.
Why the Controversy?
In 2017, when Arun Jaitley proposed it, he claimed that it would bring transparency in political funding and in the electoral system. Critics, on the other hand, say that buying an electoral bond does not reveal the identity of the buyer, which can be used as a means to use black money.
Later, this scheme was challenged in 2017 itself, but the election started in 2019. On April 12, 2019, the Supreme Court directed all political parties to submit all related information about the election bond scheme to the election panel by May 30, 2019. However, the court did not block this plan.
In December 2019, the Petitioner Association for Democratic Reforms (ADR) filed a petition against the scheme. Media reports revealed the concerns of the election panel and the Reserve Bank of India about how the central government ignored them regarding the electoral bond scheme.
Indian Purchasers Can Buy, Valid for 15 Days
Before the immediate ban by the Supreme Court, Indian State Bank branches were issuing election bonds. Purchasers can donate these bonds to the party of their choice. However, eligible parties must have received at least 1% of votes in the last Lok Sabha or Vidhan Sabha elections.
Purchasers can buy bonds ranging from ₹1000 to ₹1 crore. They must provide complete KYC to the bank. Those who had donated these bonds in elections were required to get at least 1% of votes.
Within 15 days of donating the bonds, the receiving political party had to encash them through a verified bank account. According to regulations, any Indian can purchase them. The identity of the bond buyer remains confidential.
Purchasers also receive a tax rebate. These bonds remain valid for 15 days after issuance.
