NEWS
29/01/2020 7:19 AM IST

SBI Lied In RTI Replies On Electoral Bonds

However, the bank regularly shares updates on the controversial funding scheme with the finance ministry, documents reveal.

This story is a part of #PaisaPolitics, HuffPost India’s investigation into how the Modi government brought untraceable funds into Indian politics. Read the rest of our series here.

NEW DELHI — The State Bank of India (SBI) resorted to misinformation, and in some cases falsehood, in its responses to Right to Information (RTI) inquiries on the controversial electoral bonds scheme, even as it regularly funnelled information on the scheme to the Finance Ministry, documents reviewed by HuffPost India establish.

The SBI’s increasingly evasive, and in some cases outright false, answers to 13 pointed questions filed by transparency activist Venkatesh Nayak, in an RTI request dated December 4, 2019, reveal the extent to which bank officials are prepared to protect their political masters in Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP)-led government. The bank’s ‘answers’ were signed off by Naresh Kumar Raheja, SBI’s Deputy General Manager and Central Public Information Officer.

This is significant as the electoral bond scheme has been criticised for its opacity, its potential for misuse, and well-founded criticism that the scheme allows the government to monitor exactly who is donating money to whom, while keeping the opposition and the rest of the country in the dark.

The scheme’s design places disproportionate responsibility on institutions such as SBI to remain neutral implementers of the scheme; that the bank is resorting to falsehoods in RTI replies suggests it is only too eager to obey the Finance Ministry’s diktats. 

In November 2019, HuffPost India revealed how a secret number on each electoral bond allows SBI to trace every transaction from start to finish, belying any claims of donor anonymity. HuffPost India also revealed how SBI accepted expired bonds at the directions of the Finance Ministry.

In the same series of stories, HuffPost India also disclosed that when SBI first began to receive information requests under the RTI, the bank illegitimately asked the finance ministry for permission to divulge information. Under the RTI law, the SBI is an independent public authority that does not need permission from the Union government. 

First as falsehood

Transparency activist Nayak’s queries were crafted to get a sense of just how the electoral bond scheme has been utilised by donors since it was first announced in February 2017 and implemented in March 2018, when the first tranche of bonds were sold. (It is worth noting that the BJP has garnered 95% of the money donated through the first tranche.)

One clutch of questions pertained to the numbers of electoral bonds printed, sold and purchased, the date-wise record of when these bonds were redeemed (to understand how long these bonds were held by the buyer), how long SBI maintained the paper trail of redeemed and forfeited bonds, and the physical locations where these redeemed bonds were held.

These questions were important as the Reserve Bank of India (RBI) had expressed concerns that the bonds, which are essentially bearer bonds, could be used to launder money, and if issued in sizable quantities could undermine faith in the Indian currency. 

Read how the Modi government dismissed the RBI’s objections to the controversial electoral bond scheme.

But when Nayak asked SBI how many bonds of each denomination had been sold in 2018 and 2019, the bank replied, “The information sought is not available with this public authority in the form that is demanded and hence could not be provided.”

This is untrue.

Documents obtained through RTI by another transparency activist, Commodore Lokesh Batra (retired), and reviewed by HuffPost India, reveal that the SBI maintains this data, shares it periodically with the finance ministry, and takes instructions on issues regarding printing of these bonds.  

As early as April 4, 2018, when only the first tranche of electoral bonds had been sold, SBI provided detailed information about the sale and redemption of these bonds to the finance ministry. It did so regularly after each tranche was sold and redeemed.  

Nayak also asked for a date-wise record of transactions involving the sale of Electoral Bonds by every SBI branch allowed to sell these bonds since sales first began in March 2018.

SBI claimed the bank’s head office had not compiled this information from its branches, and doing so “would disproportionately divert the resources of the Bank.”

This too is untrue.

Documents reviewed by HuffPost India reveal that SBI has a special team, called the Transaction Business Unit, which operates the Electoral Bonds Scheme. The Transaction Business Unit maintains a centralised record of all electoral bond transactions. The data is regularly collated by the bank from all its branches, and is shared with the finance ministry at the end of each 10-day sale window for electoral bonds. 

While SBI has over 24,000 branches across the country, the bonds can only be sold through 32 designated branches — belying claims that compiling this data would disproportionately divert the bank’s resources. 

The bank used the same excuse to deny answers to questions on how many bonds, of each denomination, had been sold in each transaction and how many of these had been actually encashed by political parties.

Yet, finance ministry records accessed by activist Batra show that it receives updates from the SBI regularly on denomination-wise sale of bonds a few days after each sale window period closes. 

The bank has previously even disclosed under RTI the total value of bonds encashed in each tranche of sale. 

Then as farce

Another clutch of Nayak’s questions tried to assess the recurring costs of the electoral bond scheme. SBI refused to answer these questions claiming, “The information sought by the applicant is the information of commercial confidence in nature, disclosure of which would harm the competitive position of the bank. Hence denied as it is exempted under section 8(1)(d) of the RTI Act.” 

The SBI’s position is untenable as the bank has a full monopoly over the electoral bonds scheme. No other bank is permitted to sell them. It is designated to run it as a scheme of the government and not as a commercial enterprise of an independent bank. Also, SBI already collates and provides these details to the finance ministry. 

By the end of Nayak’s list of questions, SBI appears to have taken an increasingly farcical approach to denying information.

When Nayak asked just how long SBI held onto physical electoral bonds, redeemed or forfeited by political parties and donors, before destroying them, and the actual location where these bonds were held in physical custody, the bank claimed providing this information could “cause unwarranted invasion of the privacy of the individual.”

The information was, therefore denied.

Under the RTI Act, public authorities can redact or withhold information that pertains to the private lives of citizens and other ‘third party’ entities. It is clearly not the case here.

HuffPost India has sent a detailed questionnaire to SBI. This story will be updated when the bank responds.