New Delhi: The State Bank of India’s (SBI) application for time till 30 June to disclose information relating to electoral bonds is not justifiable and is based on an erroneous reading of the Supreme Court’s directions to it, say senior government and SBI officials who were in service when electoral bonds were introduced and implemented.
According to the SBI’s application before the Supreme Court on 4 March, the bank is attempting to match the buyers of each electoral bond with the political party that encashed that bond. This, the bank said, is a time-consuming process and therefore could not be done by the court-determined deadline of 6 March.
However, the former government officials and bankers said that not only was the matching process a misinterpretation of what the SC had asked, but that the design of electoral bonds would ensure that such a matching process would not be possible at all.
That said, the bankers do acknowledge that the data gathering exercise would be time-consuming — longer than is being made out by some experts — but say it would not take as long as the SBI is making it out to be.
“The SBI has gone a step further than what the court has asked and is saying it needs to match the data between buyers of electoral bonds and the encashers,” Subhash Chandra Garg, former finance secretary, told ThePrint.
Garg was secretary in the department of economic affairs in the Union Ministry of Finance when electoral bonds were introduced in 2018.
“The matching exercise was not required, and it looks like the SBI is using this self-imposed matching requirement to make it seem like the data-gathering process is much longer than it needs to be,” Garg added.
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Mismatch between court order & SBI actions
On 15 February, the Supreme Court declared electoral bonds as “unconstitutional” and asked the SBI — the sole entity authorised to sell the bonds — to disclose particular information about the buyers and redeemers of these bonds since April 2019.
“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 (Election Commission of India),” the Supreme Court’s order read. “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.”
The court further directed the SBI to disclose the details of political parties that have received contributions through electoral bonds since April 2019.
“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,” the order said.
At no point in the order does the court direct the SBI to match the buyers and encashers of each electoral bond, yet this is what the SBI says it is doing.
“It is submitted that the 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 SBI submitted in its application to the Supreme Court.
The bank further said that 22,217 electoral bonds were used to make donations to political parties since April 2019.
“Coupled with the fact that two different information silos existed, this would mean that a total of 44,434 information sets would have to be decoded, compiled and compared,” the SBI said.
Not all data stored digitally
The overwhelming directive to maintain the anonymity of donors of electoral bonds meant that the SBI ensured that the Know-Your-Customer (KYC) documents of the donors were not stored digitally, a former official in the senior management of SBI told ThePrint on the condition of anonymity as the matter is still sub-judice.
This official was instrumental in the implementation of the electoral bond scheme in the bank, and said that orders were given to ensure that KYC documents were kept only in physical form.
“We only stored the serial numbers of the electoral bonds, the date they were sold, and the denomination in digital form,” the official said. “All the KYC documents were kept in envelopes in the central office in Mumbai.”
Matching the serial numbers with the contents of each of the 22,217 envelopes would be a time-consuming process, the official explained, but added that it would be much less than what the SBI is claiming.
“Each of those 22,000-plus envelopes will have to be opened and matched with the digital records of the electoral bond serial number,” the official said. “This will be time-consuming, no doubt. But whether it will take an extra four months, the SBI will have to justify before the court. I do not think they will need nearly as much time.”
According to Garg, it shouldn’t take the SBI “more than a day” to furnish the information required by the court.
Serial numbers can’t identify who encashed bonds
Another former official of the SBI who worked in the bank’s technology division in the early years of the implementation of electoral bonds told ThePrint that each bond had a unique serial number, written on the bond in special ink visible only under ultraviolet light. This number was, however, recorded only at the time of purchase, and not at the time of encashment.
“The purpose of the serial number was to ensure that there was no forgery of electoral bonds,” the former technology officer of the SBI said. “We recorded the serial number of each bond that was sold for reconciliation purposes with our internal records, to ensure no fake bonds were sold.”
“However, when a party encashed the bonds, the serial number of that bond was not recorded as it would have defeated the purpose of anonymity,” the officer said.
Garg agrees with this assessment, saying that the SBI will never be able to match the buyer of a particular bond with the political party which received it.
“It is not possible for the SBI to discover who bought a particular bond and which particular party received it once all the 22,000-odd bonds become part of a pool,” he said. “Why the SBI thought of this as an excuse for postponing the furnishing of the information the court asked for confounds me.”
(Edited by Nida Fatima Siddiqui)
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