Supreme Court Demands Full Disclosure on Electoral Bonds from SBI
In a significant move on March 18, the Supreme Court intensified its push for transparency in political funding, requiring the State Bank of India (SBI) to reveal detailed information on electoral bonds. The Court ordered the Chairman and Managing Director of SBI to confirm via affidavit that the bank has provided all details on electoral bonds, setting a compliance deadline of March 21. SBI is to disclose exhaustive details of electoral bonds from April 2019 onwards, including the specific alphanumeric numbers of each bond.
Election Commission's Role
Simultaneously, the Election Commission of India is instructed to promptly publish the disclosed details, ensuring public access to information on political funding. This step is crucial for reinforcing public trust in the electoral process and the integrity of political financing.
Chief Justice DY Chandrachud highlighted the importance of uncompromised disclosure by SBI, stressing the need for the bank to include all relevant bond details, such as alphanumeric and serial numbers. His remarks reflect the judiciary's commitment to preventing future controversies over bond disclosures and ensuring that SBI adopts a transparent and proactive approach in sharing information.
Context and Implications
What are Electoral Bonds and how do they work?
An Electoral Bond is a type of financial instrument that functions like a Promissory Note and an interest-free banking tool. These bonds can be acquired by any Indian citizen or entity registered within India, contingent upon adhering to the Know Your Customer (KYC) standards set by the Reserve Bank of India (RBI).
Before Electoral Bonds were introduced, political funding in India was significantly dependent on contributions from both individuals and corporations, which supported the electoral campaigns and ongoing operations of political parties. The urgency for electoral reforms to tackle related issues was emphasized by various sectors, including civic organizations, electoral oversight groups, and the judiciary. To address these concerns, the government undertook measures to revamp the electoral framework and boost the transparency of political contributions. Launched in 2017 via the Finance Act, Electoral Bonds were part of these reforms aimed at cleaning up political funding and enhancing transparency.
Electoral Bond Funding: A Five-Year Overview
Data provided by the State Bank of India to the Election Commission of India reveals that the Bharatiya Janata Party led the charge in electoral bond cash-ins, with Rs 6,061 crore making up 48% of the total encashed by political entities since April 2019, until the Supreme Court discontinued the program in February. The Trinamool Congress secured second place with a collection of Rs 1,610 crore, with the Indian National Congress trailing closely with Rs 1,422 crore. The top five was completed by Bharat Rashtra Samithi (previously known as Telangana Rashtra Samithi) and Biju Janata Dal, garnering Rs 1,215 crore and Rs 776 crore, respectively.
On the opposite end, political parties like the All India Anna Dravida Munnetra Kazhagam (AIADMK), Sikkim Democratic Front, Maharashtrawadi Gomantak Party, J&K National Conference, and Goa Forward Party collectively amassed just Rs 13 crore in donations from April 2019 to 2024. Overall, 24 political parties benefitted from electoral bond donations over the past five years, with a total accumulation of Rs 12,769 crore.
The Electoral Bonds Controversy
In a landmark decision in February 2024, the Supreme Court declared electoral bonds “unconstitutional”, citing the scheme's lack of transparency in political party funding as a violation of citizens' right to information. The court also ordered SBI to disclose all information concerning the electoral bonds it had processed.
Despite this, on March 4, SBI requested an extension until June 30 to reveal the details of the electoral bonds redeemed by political parties. The Supreme Court rejected this request, mandating that SBI provide all pertinent information to the Election Commission of India by March 12, and instructed the latter to make this information public by March 15.
SBI had expressed concerns about needing additional time to link donors with their respective political party recipients. Nevertheless, the Supreme Court clarified that the bank was only to release the information already in its possession, without the need for matching donor details with political parties.
Following the court's directives, SBI submitted the required details about electoral bonds to the Election Commission of India on March 12. Subsequently, the Election Commission of India disclosed this information on March 14. On March 17, it further unveiled specifics about the electoral bonds, including the redemption amounts for each political party. This release of information came after the Supreme Court's directive to disclose all electoral bond details previously submitted to it by the Election Commission of India in November 2023.
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