The State Bank of India (SBI) is the only bank authorised to sell and redeem electoral bonds. Since thousands of crores pass through SBI's hands to political parties, the scheme must be flawless. But RTI replies reveal that SBI is unable to conduct proper eligibility checks on political parties who receive donations via electoral bonds.
Via RTI The Quint had earlier revealed that the RBI, EC, and the Union Law Ministry had raised strong objections to the Electoral Bonds scheme before its launch - that it could be a vehicle for money laundering and that hiding donors’ identities would allow black money into the scheme.
The scheme was introduced to facilitate white money in political funding and to keep the identity of donors anonymous. The Quint, in a series of articles, had debunked both these claims of the government.
In April 2019, based on a petition filed against the electoral bonds scheme, the Supreme Court ordered, “all political parties who have received donations through electoral bonds till date, to submit (an affidavit) to the EC in a sealed cover”. The affidavits were expected to include detailed particulars of the donors as well.
By May 2019, 105 political parties had submitted their affidavits to EC in sealed covers. In February 2020, the EC informed the Supreme Court that of the 105 political parties in the list, 4 were listed as having submitted “unidentified address of political parties/addressee”. They either failed to mention the name or address of the political party, or both.
The question is, how did these 4 parties manage to redeem electoral bonds when their details were not even available with the EC?
We do not know the amount of money that each of the 105 political parties redeemed via electoral bonds, as their affidavits were submitted in sealed covers.
The Association of Democratic Reforms (ADR) did a detailed analysis of the affidavits submitted. What they found was astonishing!
68 Ineligible Political Parties Received Donations Via Electoral Bonds
As per provisions of the electoral bonds scheme, only political parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951) and have secured at least one per cent of the votes polled in the last Lok Sabha or Vidhan Sabha election, as the case may be, are eligible to receive Electoral Bonds.
In its eligibility analysis of the 105 political parties who had submitted electoral bond affidavits to the EC, experts at ADR identified 69 registered unrecognised political parties. In other words, these political parties are registered with the EC but are not recognised parties.
Of these 69, only 1 party was eligible to receive electoral bonds because it had got over one percent of the vote share in its previous election.
There could only be one possible reason why political parties which are not even contesting elections, are getting electoral bonds donations. That is, to launder money.Jagdeep Chhoker, Founder Member, ADR
Of the remaining 68 parties, the Election Commission’s website did not have details of 11 political parties on whether these parties had ever contested Lok Sabha or Assembly elections.
These 11 political parties are namely, Makkal Masotha Katchi, Public Party, Hindustan Action Party, Rashtriya Peace Party, Aam Jan Party (Secular), A.T.R Kazhagam, (Annan Tamilaga Rising Kazhagam), United Front Party, Jay Janta Party, Praja Congress Party, Akhil Bhartiya Manavadhikar Vichar Manch Party, and Labour Samaj Party.
Please note that all 105 affidavits were filed in May 2019, right after the Lok Sabha elections.
The question is, shouldn’t the Election Commission de-register these political parties after conducting a proper audit?
Has SBI Failed to Implement the Bond Scheme?
To conduct a reality check on how SBI verifies the eligibility of a political party, in May 2020, transparency activist Commodore Lokesh Batra (Retd), filed RTIs with the bank. He also attached the list of 105 political parties who had submitted electoral bonds affidavits to the EC.
In his RTI query, Batra asked,
“Provide ‘Guidelines’ /’Standard Operation Procedure (SOP)‘ and the process laid down by the SBI to ensure that electoral bonds are not deposited into the accounts of non-eligible Political Parties.”
In response, SBI said,
“SBI verifies the eligibility criteria from the Election Commission of India (ECI) website and to ensure the proper control, SBI centrally monitors the opening of Current Account of Eligible Political Parties for redemption of electoral bonds.”
Batra filed another RTI with SBI in June 2020 asking,
How frequently does the SBI verify the “eligibility of a political party” and what actions are taken if electoral bonds are redeemed by ineligible political parties?
SBI’s response,
“We verify eligibility criteria of eligible political party before start of each phase (sale of electoral bonds). No information (on action taken against ineligible party) is available held with the bank.”
The RTI replies from SBI reveal multiple loopholes in the implementation of the electoral bonds scheme. Clearly, SBI is unable to follow the mechanism to verify eligibility of political parties.
If SBI is actually verifying eligibility of parties before sale of bonds in every phase, as mentioned in the RTI, then how did 68 ineligible parties managed to redeem bonds? Unfortunately, we don’t know how much money these 68 parties parties got as donations via electoral bonds, but the fact that redeemed bonds is shocking enough.
This raises some more questions:
- Why is the SBI not conducting proper checks to ensure that electoral bonds are redeemed only by eligible political parties?
- Now that the list of ineligible political parties who received bonds is in the public domain, shouldn’t SBI and EC set up an inquiry to look into this major slip-up?
Unfortunately, the electoral bonds petition seeking interim stay on the sale of electoral bonds is still pending in the Supreme Court. Shouldn’t a petition about a scheme which is surrounded with multiple controversies and clearly having several loopholes, be heard on priority by the Supreme Court?
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