Here’s How The Quint’s Exposé on Electoral Bonds Affects You

The Quint’s investigation has revealed that anonymity, in the case of electoral bonds, is a farce.

4 min read
Hindi Female

Announcing the details of the contentious electoral bond scheme in January this year, Union Finance Minister Arun Jaitley said sparing political parties from naming donors reduced transparency. Admitting this as a “compromise”, the FM said it would be improved upon in the future.

Earlier, he had justified keeping the identity of donors anonymous, saying it would ensure that corporates and individuals could now donate to even Opposition parties without the fear of retributive action from the party in power.

But, as The Quint’s investigation has revealed, anonymity, in the case of electoral bonds, is also a farce.


Fact 1: The Quint purchased two electoral bonds worth Rs 1,000 each and had them tested at a reputed forensic science laboratory. The result revealed an alphanumeric number on the right top corner of the original document when examined under ultra violet (UV) light.

Implication: Any notion of anonymity before the government is a sham when it comes to electoral bonds. The ruling party at the Centre will have definite information on who is donating how much money and to which party. So, if you’re a corporate entity or an individual looking to donate money to a political party in exchange for a tax exemption, you need to get inventive.

Here’s why.

One can purchase an electoral bond only after submitting one’s ‘Know Your Client’ – or KYC details – to the State Bank of India. In fact, the bank insisted that The Quint’s reporter furnish her original identity card, along with self-attested photocopies. In doing so, one’s name and details are known and recorded by the bank.

The political party is required to record the amount donated, but since the electoral bond bears no other identifying marker, it does not have to record or submit the name of the donor when it files its income tax returns.

The recipient can encash the electoral bond only at select SBI branches. It is here that the hidden serial number comes into play.

By matching the donor’s KYC details against the alphanumeric serial number, any authority with the wherewithal to read the hidden code can easily identify who is donating how much money and to whom.

The Quint had earlier reported that since the SBI falls under the Finance Ministry, the ruling party could easily access the total value of electoral bonds and make an educated guess of how much money it did not receive.

However, having learnt that there is indeed a secret serial number, invisible to the naked eye, on each of the electoral bonds released by the government, one can conclude that anonymity while donating through the banking system is a myth.

In short, Big Brother is watching.


Fact 2: The State Bank of India officials at the Parliament Street branch in New Delhi admitted to The Quint’s reporter that all instructions related to electoral bonds were coming from the Finance Ministry, indicating that data was being collated and shared daily.

Implication: Big Brother is keeping active tabs on any banking activity that involves electoral bonds. This, according to the government’s own notification on electoral bonds, is illegal.

Here’s what The Quint found.

Our investigation suggests that the State Bank of India is in constant contact with the Finance Ministry on matters related to the issuing and redeeming of electoral bonds. In fact, the bank officer insisted our reporter furnish her original PAN card “as the government is keeping a close watch on the sale of the electoral bonds” and admitted that “we have to collate data on a daily basis and forward it, I hope you understand how sensitive this is.”

Q: Why is the State Bank of India answerable to the government?

The SBI is a government-owned corporation which was brought into existence through the State Bank of India (Subsidiary Banks) Act, passed by Parliament in 1959. As of March 2018, the Government of India owned 58.86 percent equity shares in the SBI. Its chairman and board of directors are appointed by the government.

Q: And what about your privacy?

The Ministry of Finance notification dated 2 January 2018 sets out the do’s and dont’s for the State Bank of India on electoral bonds. Under para 7(4) of this notification, “The information furnished by the buyer shall be treated confidential by the authorised bank and shall not be disclosed to any authority for any purposes, except when demanded by a competent court or upon registration of criminal case by any law enforcement agency.”

So, if the SBI were to release the information they have, which would include the hidden numbers and the personal information of the buyer, even to the government, the bank is violating the notification.


Fact 3: At no point did Arun Jaitley, the Union Finance Ministry or even the notification issued to bring electoral bonds into effect, mention that there exists a hidden alphanumeric number on the electoral bond that can help the government secure (read: track) the electoral bond.

Implication: This ‘slip-up’ by the government is in direct contradiction to the claims made by the Finance Minister on keeping donors’ identity anonymous.

Q: But, isn’t it illegal?

Not exactly. The legal scheme for the bonds comes from the Finance Act 2017. This called for an amendment to Section 31(3) of the RBI Act 1934 to allow the issuance of electoral bonds, details of which were to be notified by the Ministry of Finance. Neither of these say anything about confidentiality and protection of identity in the operative clauses.

This inclusion of numbers looks – per se – to be more of an issue of propriety than illegality, given Jaitley’s previous statements. At best, you might be able to argue misrepresentation by Jaitley, though this too would probably be very difficult.

If this were to be taken up in the Supreme Court or the High Courts, the one constitutional ground which could be raised is that this scheme violates Article 14 by being arbitrary and having the possibility of leading to differential treatment in law, though this would probably be a pretty hard sell since it deals with a potential misuse.

Q: Have we been been misled?

Most certainly, yes. If the ultimate goal is total transparency, the government needs to let the public in on the knowledge that it hopes to secretly harbour.

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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Topics:  SBI   Ministry of Finance   Electoral Bonds 

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