SBI in the aftermath of electoral bond scheme judgment – Dubious response

Source: The post SBI in the aftermath of electoral bond scheme judgment has been created, based on the article “Dubious response: The SBI’s reasons to delay publication of details of electoral bonds defy belief” published in “The Hindu” on 9th March 2024.

UPSC Syllabus Topic: GS Paper 2-Governance – Important aspects of governance, transparency and accountability and GS Paper 4 Ethics – Information sharing and transparency in government.

News: The article describes how India’s Supreme Court ruled the Electoral Bond scheme illegal due to its allowance of secret political donations. The State Bank of India is struggling to provide the required data on these bonds as demanded by the court.

For detailed information on Supreme Court decision on the electoral bond scheme read here

What were the Supreme Court’s instructions for the SBI in the electoral bond scheme judgment?

Stop Issuing Bonds: The Supreme Court directed the State Bank of India to immediately stop issuing electoral bonds.

Reveal Details: The bank must provide details of the political parties that received funds through these bonds, along with the date of purchase and the denomination of each bond.

Deadline for Disclosure: The information was to be furnished by March 6.

For information on electoral bond scheme read here

What was the State Bank of India’s role in the electoral bond scheme?

Exclusive Issuer: The State Bank of India was the sole authorized bank to issue electoral bonds.

Handling Donations: It facilitated anonymous political donations through these bonds.

Data Storage: The bank stored data about donors, including purchase dates, and issued unique alphanumeric codes for each bond.

What is the SBI action on the SC’s Instructions?

Seeking Time Extension: The State Bank of India requested time until the end of June 2024 to provide the required data, which is past the expected date of the next general election.

Challenges in Data Reconciliation: The bank mentioned the difficulty of reconciling two sets of information: one related to bond purchases and the other to the parties receiving the bonds.

Digital Storage Limitations: SBI indicated that it digitally stored only the number of bonds issued, not the Know Your Customer (KYC) details of purchasers.

Way forward

The Supreme Court should ensure the State Bank of India adheres to the deadline for revealing bond details before the election. This is crucial for transparency in political funding, especially given the significant donations received by parties like the Bharatiya Janata Party and Congress.

Question for practice:

Discuss the challenges for State Bank of India in complying with the Supreme Court’s instructions on disclosing electoral bond details and its impact on political funding transparency.