SBI dragging feet on Electoral Bonds disclosure, but obliged when Centre sought info: Report

The State Bank of India (SBI) has missed the Supreme Court-set deadline of March 6 to furnish details of electoral bonds encashed by political parties. In an application filed on Monday (March 4), SBI sought for an extension till June 30, stating that the process of extricating information from “each silo” was a “complex” and “time consuming” affair.

However, an exclusive report by The Collective has revealed that the bank isn’t as helpless as it portrays itself to be and instead had been quite prompt when similar requests to furnish data were made by the central government in the past.

What the SC verdict said?

In its verdict last month, the Supreme Court, while striking down the electoral bonds scheme, had directed the SBI to furnish details on the bonds encashed by political parties to the Election Commission (EC) by March 6. The apex court said the details must include the date of encashment and the denomination of the bonds. A five-judge bench headed by Chief Justice of India (CJI) DY Chandrachud had also instructed the EC to publish the information shared by SBI, on its official website by March 13.

However, in an application filed before the top court on March 4, the SBI contended that retrieval of information from "each silo" and the procedure of matching the information of one silo to that of the other would be a time-consuming exercise. The plea submitted that due to stringent measures undertaken to ensure that the identity of the donors was kept anonymous, "decoding' the electoral bonds and matching donors to the donations made would be a complex process.

Now, an NGO has moved a contempt plea in the apex court, challenging SBI’s request.

SBI showed alacrity in furnishing data to Centre: Report

The report by The Collective, has dismissed the arguments made by the SBI with ‘proof’.

Documents collected by transparency activist Commodore Lokesh Batra which formed the basis of a series of investigative exposes on electoral bonds in 2019 and 2020, provide enough evidence to prove that SBI literally was on its toes to furnish information on electoral bonds, with the earliest submissions being made within just 48 hours, says The Collective’s report.

The report carries copies of documents shared by SBI with the Union Finance Ministry to supplement its claims. One of the documents shows that SBI submitted the data on electoral bonds 48 hours after the ministry-set deadline ended.

The document provides details on the SBI branches across India where particular electoral bonds were sold and redeemed, mentioning the exact number of bonds against each branch and the amount encashed in both physical and digital forms. However, it doesn’t provide any information on the receiver’s identity.

The report says the bank religiously sent such information to the ministry after every window period of sale, at least till 2020.

SBI meticulously maintained audit trail of bonds, claims report

The documents show that the bank meticulously maintained an audit trail of bonds that were sold and encashed by political parties. Each bond was assigned a serial number – a feature the bank had requested the Union government to be included when electoral bonds were introduced in 2018.

In its request, the bank has said that while the Electoral Bonds will not bear the name of the payee or the buyer, each bond must come with a serial number without which “there will be no audit trail available for internal control and reconciliation.”

Why SBI’s argument before SC doesn’t hold water

While seeking more time from the Supreme Court to provide details on the Electoral Bonds, SBI said it is a complex process to extricate the information as the data on donors is kept in a separate “silo” from the data on political parties that encashed the bonds.

The bank says information both on the sale of bonds (and donors) and on political parties that encash the bonds is sent to its Mumbai headquarters in sealed envelopes.

As the data on the donors and the receivers was deliberately decoupled to keep the matter anonymous, now tallying both together will take months, given that 22,217 electoral bonds have been issued since 2019, the bank argues.

However, documents (in the highlighted portion below) accessed by The Collective, show that the Union Finance Ministry in 2018 admitted in an internal report that SBI can connect the donor with the receiver in real time when the electoral bonds come for encashment.

The Know Your Customer (KYC) process mandated by SBI (meant to identify the donor) for the sale of Electoral Bonds as well as existence of hidden serial numbers on the bonds made connecting the donor with the receiving political party possible.

“Even if the EB is issued as a paper bearer bond without the name of the payee, SBI would know who was the donor (KYC details of donor have to be collected) is and would be able to link him with the payee election party when EB comes for encashment,” the internal document says.

Subhash Chandra Garg, who as the then finance and economic affair secretary, supervised the implementation of the Electoral Bonds scheme in 2017 and 2018, was asked by Mojo Story if the SBI’s hands are really tied in this case. He said “it was the lamest excuse” the bank could come up with.

“To my mind, it is the lamest excuse which SBI has put in (before the Supreme Court)....It doesn’t require silos to be reconciled or connected etc…for furnishing this information the SBI needs no time at all. What SBI seems to be saying is that we will connect the buyers of the bonds and the recipients of the bonds…even for doing that information, which is not required, the SBI will not take any more time. As I said earlier, every bond has one number so if you sort the information on this number you can get the information very easily …possibly the SBI has been motivated to file this application,” he was quoted as saying.

SBI encashed expired bonds: Report

The report says that the SBI may be dragging its feet on the Supreme Court order but showed exemplary alacrity in encashing expired Electoral Bonds for a particular political party in 2018.

It says the party in question in 2018 had approached the bank’s New Delhi branch requesting to redeem bonds which were past their lifespan (Electoral Bonds had a shelf life of 15 days).

According to The Collective report, the bank wasted no time in relaying the information to its Mumbai-based Transaction Banking Unit (TBU) – which oversees the life of an Electoral Bond, from printing to redemption. The TBU reportedly collated information on the said bonds within hours while keeping Union Finance Ministry sources in the loop.

The report says, the SBI corporate office asked the Finance Ministry to advise it on the matter as the said bonds had expired. The ministry reportedly advised SBI to allow the political party to encash the expired bonds. The expired bonds were encashed in less than 24 hours, the report claims.

The political party was kept anonymous in all records of the ministry and SBI. The party reportedly had 10 expired bonds of ₹1 crore each.