As more information emerges on electoral bonds, a recent report by The Reporters’ Collective states that SBI violated norms of electoral bonds by allowing Bharatiya Janata Party (BJP) to encash expired electoral bonds in 2018 and 2022.
According to the report, in 2018, the then Union finance minister late Arun Jaitley instructed the State Bank of India (SBI), the only bank where electoral bonds can be purchased, to let BJP encash expired electoral bonds worth Rs 10 crore.
An electoral bond allowed individuals, corporations or organisations to contribute or donate money to any political party anonymously by purchasing bonds from the SBI. It was introduced in 2017 under the Narendra Modi government. The expiry date of these bonds is 15 days, after which it will automatically be transferred to the Prime Minister Relief Fund.
In 2019, The Huffpost reported that SBI, in May 2018, a few months before the Lok Sabha and Karnataka elections, had manipulated regulations by opening a “special” 10-day window for an unknown political party and let them encashed an expired electoral bond worth Rs 10 crore.
“These bonds were purchased because Prime Minister Narendra Modi’s Office had illegally directed the Finance Ministry to break its own rules around the sale of these secretive electoral bonds by opening a “special” 10-day window for them days before Karnataka went to polls,” the report reads.
While BJP won the 2019 General Elections and Modi was re-elected as the Prime Minister of India, the party saw a hung Assembly in Karnataka.
With the Supreme Court’s latest ruling ordering the election commission to display all information related to electoral bonds on its website, the political party for whom Jaitely bent rules was revealed to be the BJP.
On May 23, 2018, a few electoral bond holders – representatives of a political party holding the physical bond that must be deposited in a political party’s account – went to the SBI’s Delhi branch to encash bonds worth Rs 20 crore. These bond holders were later disclosed as BJP members.
Upon checking, SBI found that the electoral bonds were brought on May 3, 2018, and May 5, 2018, implying they had surpassed the 15-day period of redemption.
On May 24, the following day, SBI wrote to the Union finance ministry office about its inability to have BJP encash the expired electoral bonds. The then deputy director in the economic affairs ministry Vijay Kumar replied: “As some amount of lack of complete clarity may have been witnessed in the bonds issue in last windows, SBI may grant credit to holders of such bond purchased before 10th May, 2018 if the bonds were deposited in 15 working days,” he said adding, “No such accommodation will be available in future.”
Thus, the money, which as per rules, should automatically transfer to the Prime Minister’s National Relief Fund, an official fund used as immediate relief in case of natural calamities, was not deposited.
Kumar’s letter was approved by the secretary of the department of economic affairs SC Garg, the highest ranking officer in the finance department, The Reporters’ Collective said.
The breach was again conducted in December 2022, just before the Gujarat state elections, where the saffron party won with historic margins.
The BJP has emerged as the largest beneficiary to have received 50% of the encashed electoral bonds, as per the data available on EC’s website. The party received Rs 8,251.8 crore through the scheme, out of the total bonds sold worth about Rs 16,518 crore.
The Indian National Congress came second with Rs 1,952 crore, far behind the BJP. The Trinamool Congress was a close third at Rs 1,705 crore.
