It’s Illegal: Ex-RBI Director on Govt’s Control of Electoral Bonds

“If the number was for security, there was no need to keep it hidden,” says a former RBI director.

The Quint’s investigation reveals that electoral bonds have hidden numbers printed on them.

(Photo: The Quint)

The only probable purpose of hidden serial numbers on electoral bonds could be to track donors, a former director of the Reserve Bank of India (RBI) told The Quint.

In an expose published on 12 April, The Quint revealed the presence of concealed unique alphanumeric numbers on government-issued electoral bonds sold by the State Bank of India (SBI). The use of these numbers to track donations to opposition parties is completely at odds with Finance Minister Arun Jaitley’s claim that the bonds will help keep the link between a political donor and party confidential.

Vipin Malik, a former RBI Director, was shocked at the news of such a hidden number on electoral bonds.

I have never seen such a hidden number, because why would someone hide such a number?

Vipin Malik, Former Director, RBI

Lab tests conducted on the bonds show that a hidden number on the top-right corner can only be seen under UV light.

‘Even Currency Doesn’t Have Hidden Numbers,’ Says Malik

An electoral bond is nothing but a form of money, which is valid for 15 days. It will expire if it is not donated to a party within 15 days of issuance. Malik says that currency notes also carry security features, but no such hidden number is present.

I don’t know what’s the purpose of hiding this number. Even on a currency note, the number is visible. I can show you the currency note, like here in two places at least it is very visible.

Vipin Malik, Former Director, RBI

Hidden Number Cannot Be a Security Feature: Malik

According to Malik, the hidden unique number on the bond cannot serve security concerns. It is solely meant to track the donor as he/she has to submit all documents while purchasing the bonds.

Electoral bonds are sold only by the SBI in select branches every quarter for a limited number of days. The Quint purchased two bonds on 5 and 9 April by submitting KYC documents of this journalist, including her Aadhar card, Pan Card and photocopies of her passport.

Well, if they wanted to keep it as a security number then they could have very well printed it to be visible. You were asked to fill a form, in which you have given all your details and a number has been issued. A party will deposit this in their account to en-cash the bond from the State Bank of India. In this case, the State Bank of India will be able to know that this bond was issued to Poonam Agarwal.

Vipin Malik, Former Director, RBI

Malik said in his of years service as RBI officer, he has “never seen a hidden feature like the one present in the electoral bond.”

He said that apart from currency, even legal stamp papers don’t carry any hidden unique numbers.

In the Indian Stamp Act also, no number is issued. But then the dealer, meaning the person who is authorised to sell the paper, and lawyers and banks issue their own number. But in the Stamp Act itself, no number is hidden. I have not seen any hidden numbers in the Indian Stamp Act.

Vipin Malik, Former Director, RBI

It’s Illegal if Finance Ministry is Controlling Sale of Electoral Bonds: Malik

A senior SBI officer told The Quint’s journalist that sale of the electoral bonds are “controlled by the Ministry of Finance”. He also said that the SBI is “just an arm of the government” which is “acting as a nodal agency” in this scheme.

Saying that we are nodal agency in any case is illegal. The scheme doesn’t say so. If it is happening, it is happening illegally.

Vipin Malik, Former Director, RBI

Clearly, the unique hidden number on the bonds is not a security feature. The government has a lot to answer. This article will be updated when we get a reply from the Ministry of Finance.