The Supreme Court on Monday, 11 March, declined to extend the deadline given to the State Bank of India (SBI) to provide data regarding electoral bonds to the Election Commission of India (EC).
In its verdict delivered last month declaring the electoral bonds scheme as 'unconstitutional', the apex court had asked that the SBI provide details of the bonds purchased between April 2019-February 2024 to the EC by 6 March, following which the EC was to make the data public by 13 March.
The SC had ordered that the EC must reveal the date of purchase of each electoral bond, the name of the purchaser of the bond, the denomination of the electoral bond purchased, and details of each bond encashed by political parties which shall include the date of encashment and the denomination.
The SBI on 4 March had filed an application to request an extension till 30 June 2024 to provide the said data to the EC. With the verdict already being seen as a setback for the central government, activists, political observers, and Opposition parties immediately pointed towards the timeline stated by the SBI, highlighting the fact that the data will not be revealed till the general elections conclude.
What did the SBI argue while seeking an extension? Why did the SC refuse to grant the bank time till 30 June? Did the SBI really need four months to provide the data in the first place?
Explained: Why SC Refused To Give SBI More Time To Provide Electoral Bonds Data
1. What Was SBI's Application and What It Argued Before Supreme Court on Monday
In its application to the apex court on 4 March, two days before the deadline set by the court, the SBI said that 22,217 electoral bonds were issued to various parties between 12 April 2019 to 15 February 2024.
The SBI sought an extension on the ground that the process of decoding the data and linking the donors and purchasers is a time consuming exercise and that the information is not available in the digital format.
Clause 7.1.2 of SOP regarding sale and redemption of the bonds stipulated that no details of bond purchasers including KYC and other details will be entered into core banking system and thus, details of purchasers of bonds are not available centrally, i.e. donor and recipient details are in two different silos.
The SBI said that since the redeemed bonds were sent to the main SBI branch in Mumbai by the authorised branches, it has to decode and compile 44,434 (22,217x2) information sets.
Appearing for the SBI on Monday, senior advocate Harish Salve told the SC bench headed by CJI DY Chandrachud that the bank needs more time to collate the data due to technicalities around the fact that the information was supposed to be secret. Salve also argued that the names of the purchasers have to be collated and cross-checked.
"I have full details on who purchased the bond and I have full details from where the money came from and which political party tendered how much... I have to also now put the name of purchasers.. the names have to be collated.. crosschecked with the bond numbers," Salve said, as quoted by Bar&Bench.
"Work is done like form to form. It will take three months more. I cannot make the mistake else I will be sued by donors , etc," Salve argued.
Expand2. What the SC Said While Quashing SBI's Plea
The bench comprising CJI DY Chandrachud, Justice Sanjiv Khanna, Justice BR Gavai, Justice Manoj Misra, and Justice JB Pardiwala ruled that the SBI already has all the data that is being sought.
"The FAQs indicated that for every purchase there has to be a separate KYC. So you have the details already," CJI Chandrachud said, as quoted by Bar&Bench.
"There is a degree of candour expected from SBI as to this is the work which was expected and this has been done," the CJI added.
While pronouncing the order, the court said: "Clause 7(4) of the electoral bonds scheme stipulates that the information furnished by the buyer of EB shall be treated as confidential by the authorised bank and shall be disclosed when called upon to do so or registration of an offence by a law enforcement agency. Thus, as per the EB scheme itself, SBI is mandated to disclose information when demanded."
"What has to be analysed is that whether SBI is justified in seeking the extension. SBI seeks extension on the ground that the process of decoding EB and relating donor to the donee is a time consuming exercise and to state this SBI has averred that info is not available in the digital format," the order stated, as quoted by Bar&Bench.
"The directions of this court requires SBI to disclose information which is already available with it. The FAQs on electoral bonds state that the KYC documents must be submitted by the purchaser each time that the bond is purchased irrespective of that purchaser has a KYC verified purchaser account. Thus, details of EB purchased and directed to be disclosed is readily available. The FAQ on EB published by SBI with respect to redemption of bonds states that each political party can only open one current account for EB redemption. The current account by the political party is only in four authorised branches. Thus, details of information of EB encashed by political parties will be available in these four branches and the slips, etc. will have to be deposited with the main bank and this process was followed," the order stated.
After the order was pronounced, Salve requested the bench to clarify that "correlating information is not needed."
Dismissing the application, the court ordered that the data on electoral bonds be submitted by the SBI to the EC by 12 March, following which the data is to be made public by 15 March.
The court also refused to hold the SBI in contempt as per a plea moved by The Association for Democratic Reforms (ADR) and the Communist Party of India (Marxist) (CPI(M)) - two of the four petitioners in the case.
Expand3. Will the SBI Reveal Correlating Information Between Donors and Political Parties?
In its order, the court, as quoted by LiveLaw stated, "The operative directions of this Court directed the SBI to disclose the transactions as set out in direction B and direction C."
Directions b and c of the court order, issued in February, are as follows:
"b. 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. 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;
c. SBI shall submit the details of political parties which have received contributions through Electoral Bonds since the interim order of this Court dated 12 April 2019 till date to the ECI. 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;"
Speaking to The Quint, Jagdeep Chhokar, founder and trustee of Association for Democratic Reforms (ADR) said, "This correlation red herring was invented by the SBI. The Supreme Court had originally not even asked for this linking. They had said you give information of how much worth of bond was issued on what date and who has redeemed how much worth of bond on what date."
He added, "Now, instead of giving this information, the SBI decided to do something else, which was to delay giving the information. The question of interlinking was never there. Interlinking will be done by whoever is interested in doing the interlinking."
Chhokar questioned what led the SBI to think that the data had to be interlinked before making it public.
"If the SC gives an order, you should go to the court for clarification. If the SBI on 16 February felt that there is more to the SC order than what was prima facie clear, they should have gone for a clarification. They neither went for a clarification, nor did they start working on their own understanding of the order. Two days before the deadline, they went and asked for a four month extension," Chhokar said.
"The SBI said that the connection cannot be known in four months. The connection may be known even in 24 hours, it all depends on the data and how it is correlating," Chhokar said.
Stressing that the SBI was never expected to interlink the two sets of data about the donors and the political parties, Chhokar added, "Given the three pieces of information in each silo that the SC has specifically asked for, a lot of us believe that interlinking is possible."
Expand4. The Process Behind Collating Electoral Bonds Data
Poonam Agarwal, a journalist who has extensively debunked claims of secrecy of electoral bonds, explained the collection of identifiers/data while registering for and purchasing a bond.
"When you buy an electoral bond, you have to go to one of the 29 branches of the SBI where the bonds are sold. Before they hand over the bond to you, they write the hidden unique alphanumeric number in the records that xyz person has purchased bond number – say123," Agarwal told The Quint following the 4 March application of the SBI for extension of the deadline.
"So, when the person xyz hands the bond to any political party and the political party goes back to the SBI to redeem it, the bank checks the hidden number and the name of the purchaser in the records before redeeming the bond. They also record the name of political party. All these entries and data are recorded in real time," Agarwal explained.
The FAQs issued by the SBI on electoral bonds mention several other identifiers/data points recorded at the time of sale and purchase of the bonds:
For an individual, the KYC norms, as per the RBI's guidelines, were applicable for all applicants of electoral bonds every time tghey purchased one.
In addition to application form and pay-in-slip, the applicants were to submit copy of citizenship proof and KYC documents (Aadhaar and PAN), along with originals.
For firms, organisations, and trusts, the SBI had extensively mentioned a set of key documents as identity proofs.
To redeem the bonds, the eligible political parties were to have designated 'current accounts' in any of the four designated SBI branches authorised to handle the bonds.
Expand5. 'Was the Information Not Verified Before?': Experts Ask
When it comes to the collation of identifiers/data points, Chhokar on 7 March, while speaking to The Quint, had highlighted how the SBI could claimed that the electoral bonds data was not stored anywhere digitally.
Experts also questioned the SBI's claims in the application of needing more time to verify two data sets.
"Before the designated branch where the political party is redeeming the donation it received, it would actually verify with the donor's branch first. So, without verification from the donor's branch, it sounds strange that the branch of the political party would just credit that money in their account. It is strange that those two records have not already been tallied," Chhokar had said.
RTI activist Commodore Lokesh Batra said that when the SBI takes the KYC details while issuing an electoral bond to a donor, it must have a digital record of it.
"They have the data as to who has purchased a bond and which political party has encashed it. Today, where technology in a bank like SBI does lakhs of transactions across the globe at a faster speed, preparing such data isn't difficult. Starting from KYC itself, the numbers are there. The political party, while encashing that bond, has a slip," Batra told The Quint.
Batra also pointed out that a letter of the SBI dated June 2018, which revealed the net cost of floating electoral bonds, had mentioned allocation of over Rs 60,00,000 for 'IT Systems Development'.
While both Chhokar and Batra indicated that the timeline cited to provide the data may have been done to delay it until after elections, Agarwal said: "All these entries and data are recorded real time. Since it is recorded and maintained real time, there has to be data compiled somewhere in some form. The compilation also has to be real time because they also need it for audit purposes at the end of each financial year."
"The records would be there in 29 different branches. All they need to do is to collect them together, put it in one place, file it, and hand it over to the Election Commission. Now, the point is – it is also a bureaucratic process. So, whether it takes three days, three weeks, or three months, who is going to decide that accurately?" she asked.
(This article was first published on 6 March 2024. It was updated and republished after the Supreme Court's ruling on SBI's plea seeking an extension of its deadline on 11 March 2024.)
(With inputs from Bar&Bench.)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)
Expand
What Was SBI's Application and What It Argued Before Supreme Court on Monday
In its application to the apex court on 4 March, two days before the deadline set by the court, the SBI said that 22,217 electoral bonds were issued to various parties between 12 April 2019 to 15 February 2024.
The SBI sought an extension on the ground that the process of decoding the data and linking the donors and purchasers is a time consuming exercise and that the information is not available in the digital format.
Clause 7.1.2 of SOP regarding sale and redemption of the bonds stipulated that no details of bond purchasers including KYC and other details will be entered into core banking system and thus, details of purchasers of bonds are not available centrally, i.e. donor and recipient details are in two different silos.
The SBI said that since the redeemed bonds were sent to the main SBI branch in Mumbai by the authorised branches, it has to decode and compile 44,434 (22,217x2) information sets.
Appearing for the SBI on Monday, senior advocate Harish Salve told the SC bench headed by CJI DY Chandrachud that the bank needs more time to collate the data due to technicalities around the fact that the information was supposed to be secret. Salve also argued that the names of the purchasers have to be collated and cross-checked.
"I have full details on who purchased the bond and I have full details from where the money came from and which political party tendered how much... I have to also now put the name of purchasers.. the names have to be collated.. crosschecked with the bond numbers," Salve said, as quoted by Bar&Bench.
"Work is done like form to form. It will take three months more. I cannot make the mistake else I will be sued by donors , etc," Salve argued.
What the SC Said While Quashing SBI's Plea
The bench comprising CJI DY Chandrachud, Justice Sanjiv Khanna, Justice BR Gavai, Justice Manoj Misra, and Justice JB Pardiwala ruled that the SBI already has all the data that is being sought.
"The FAQs indicated that for every purchase there has to be a separate KYC. So you have the details already," CJI Chandrachud said, as quoted by Bar&Bench.
"There is a degree of candour expected from SBI as to this is the work which was expected and this has been done," the CJI added.
While pronouncing the order, the court said: "Clause 7(4) of the electoral bonds scheme stipulates that the information furnished by the buyer of EB shall be treated as confidential by the authorised bank and shall be disclosed when called upon to do so or registration of an offence by a law enforcement agency. Thus, as per the EB scheme itself, SBI is mandated to disclose information when demanded."
"What has to be analysed is that whether SBI is justified in seeking the extension. SBI seeks extension on the ground that the process of decoding EB and relating donor to the donee is a time consuming exercise and to state this SBI has averred that info is not available in the digital format," the order stated, as quoted by Bar&Bench.
"The directions of this court requires SBI to disclose information which is already available with it. The FAQs on electoral bonds state that the KYC documents must be submitted by the purchaser each time that the bond is purchased irrespective of that purchaser has a KYC verified purchaser account. Thus, details of EB purchased and directed to be disclosed is readily available. The FAQ on EB published by SBI with respect to redemption of bonds states that each political party can only open one current account for EB redemption. The current account by the political party is only in four authorised branches. Thus, details of information of EB encashed by political parties will be available in these four branches and the slips, etc. will have to be deposited with the main bank and this process was followed," the order stated.
After the order was pronounced, Salve requested the bench to clarify that "correlating information is not needed."
Dismissing the application, the court ordered that the data on electoral bonds be submitted by the SBI to the EC by 12 March, following which the data is to be made public by 15 March.
The court also refused to hold the SBI in contempt as per a plea moved by The Association for Democratic Reforms (ADR) and the Communist Party of India (Marxist) (CPI(M)) - two of the four petitioners in the case.
Will the SBI Reveal Correlating Information Between Donors and Political Parties?
In its order, the court, as quoted by LiveLaw stated, "The operative directions of this Court directed the SBI to disclose the transactions as set out in direction B and direction C."
Directions b and c of the court order, issued in February, are as follows:
"b. 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. 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;
c. SBI shall submit the details of political parties which have received contributions through Electoral Bonds since the interim order of this Court dated 12 April 2019 till date to the ECI. 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;"
Speaking to The Quint, Jagdeep Chhokar, founder and trustee of Association for Democratic Reforms (ADR) said, "This correlation red herring was invented by the SBI. The Supreme Court had originally not even asked for this linking. They had said you give information of how much worth of bond was issued on what date and who has redeemed how much worth of bond on what date."
He added, "Now, instead of giving this information, the SBI decided to do something else, which was to delay giving the information. The question of interlinking was never there. Interlinking will be done by whoever is interested in doing the interlinking."
Chhokar questioned what led the SBI to think that the data had to be interlinked before making it public.
"If the SC gives an order, you should go to the court for clarification. If the SBI on 16 February felt that there is more to the SC order than what was prima facie clear, they should have gone for a clarification. They neither went for a clarification, nor did they start working on their own understanding of the order. Two days before the deadline, they went and asked for a four month extension," Chhokar said.
"The SBI said that the connection cannot be known in four months. The connection may be known even in 24 hours, it all depends on the data and how it is correlating," Chhokar said.
Stressing that the SBI was never expected to interlink the two sets of data about the donors and the political parties, Chhokar added, "Given the three pieces of information in each silo that the SC has specifically asked for, a lot of us believe that interlinking is possible."
The Process Behind Collating Electoral Bonds Data
Poonam Agarwal, a journalist who has extensively debunked claims of secrecy of electoral bonds, explained the collection of identifiers/data while registering for and purchasing a bond.
"When you buy an electoral bond, you have to go to one of the 29 branches of the SBI where the bonds are sold. Before they hand over the bond to you, they write the hidden unique alphanumeric number in the records that xyz person has purchased bond number – say123," Agarwal told The Quint following the 4 March application of the SBI for extension of the deadline.
"So, when the person xyz hands the bond to any political party and the political party goes back to the SBI to redeem it, the bank checks the hidden number and the name of the purchaser in the records before redeeming the bond. They also record the name of political party. All these entries and data are recorded in real time," Agarwal explained.
The FAQs issued by the SBI on electoral bonds mention several other identifiers/data points recorded at the time of sale and purchase of the bonds:
For an individual, the KYC norms, as per the RBI's guidelines, were applicable for all applicants of electoral bonds every time tghey purchased one.
In addition to application form and pay-in-slip, the applicants were to submit copy of citizenship proof and KYC documents (Aadhaar and PAN), along with originals.
For firms, organisations, and trusts, the SBI had extensively mentioned a set of key documents as identity proofs.
To redeem the bonds, the eligible political parties were to have designated 'current accounts' in any of the four designated SBI branches authorised to handle the bonds.
'Was the Information Not Verified Before?': Experts Ask
When it comes to the collation of identifiers/data points, Chhokar on 7 March, while speaking to The Quint, had highlighted how the SBI could claimed that the electoral bonds data was not stored anywhere digitally.
Experts also questioned the SBI's claims in the application of needing more time to verify two data sets.
"Before the designated branch where the political party is redeeming the donation it received, it would actually verify with the donor's branch first. So, without verification from the donor's branch, it sounds strange that the branch of the political party would just credit that money in their account. It is strange that those two records have not already been tallied," Chhokar had said.
RTI activist Commodore Lokesh Batra said that when the SBI takes the KYC details while issuing an electoral bond to a donor, it must have a digital record of it.
"They have the data as to who has purchased a bond and which political party has encashed it. Today, where technology in a bank like SBI does lakhs of transactions across the globe at a faster speed, preparing such data isn't difficult. Starting from KYC itself, the numbers are there. The political party, while encashing that bond, has a slip," Batra told The Quint.
Batra also pointed out that a letter of the SBI dated June 2018, which revealed the net cost of floating electoral bonds, had mentioned allocation of over Rs 60,00,000 for 'IT Systems Development'.
While both Chhokar and Batra indicated that the timeline cited to provide the data may have been done to delay it until after elections, Agarwal said: "All these entries and data are recorded real time. Since it is recorded and maintained real time, there has to be data compiled somewhere in some form. The compilation also has to be real time because they also need it for audit purposes at the end of each financial year."
"The records would be there in 29 different branches. All they need to do is to collect them together, put it in one place, file it, and hand it over to the Election Commission. Now, the point is – it is also a bureaucratic process. So, whether it takes three days, three weeks, or three months, who is going to decide that accurately?" she asked.
(This article was first published on 6 March 2024. It was updated and republished after the Supreme Court's ruling on SBI's plea seeking an extension of its deadline on 11 March 2024.)
(With inputs from Bar&Bench.)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)