Complying with the directions of the Supreme Court (SC), the State Bank of India (SBI) provided the electoral bond data to the Election Commission (EC) on 12 March. The EC uploaded the same on their website on 14 March on an ‘as is where is’ basis.
The date and denomination-wise details for all the buyers who bought the bonds from 12 April 2019, and also for all the political parties who deposited them, are now in the public domain. The bond details for the earlier period should also be made public soon.
There is a lot of excitement. All sorts of analyses for the companies and individuals who bought the bonds and political parties who received them are being done and reported. A good debate has also begun. The link between who paid which political party, however, is still not available.
Upon the matter being mentioned again before the SC on 15 March, the apex court directed the SBI to disclose the unique IDs of the electoral bonds and explain its position on 18 March.
This raises a fundamental question. Was there a unique identity of each electoral bond sold by the SBI?
Further, how will the SBI respond and what can it do to carry out the SC's directions?
The Question of an Identifier
The electoral bonds scheme was designed in a way that no one would be able to establish the link or connection between the buyer of any particular bond and the political party to which such a bond was donated.
The simplest and most essential way to ensure this was not to put any identification number or any other mode of identification on the bonds. Therefore, electoral bonds had no identification number or any other identifier.
They were, however, as valuable as currency notes, albeit, for a limited duration of 15 days. There was, therefore, some apprehension that despite its short life, someone may print a fake bond(s) and pass off the same as donations to a political party which upon being deposited with the SBI, might not be discovered as fake. In such a situation, the SBI would have ended up paying without receiving the funds.
To guard against this risk, a security feature was built into every electoral bond. An invisible alpha-numeric code was printed into each bond. This code, however, was not its unique ID.
This alpha-numeric security code was not to be recorded anywhere. It could have been checked at the time of a bond’s receipt to rule out the production of fake bonds. No other use was to be made of this security feature.
The security feature served its purpose. No fake bond came to the SBI.
Did SBI Record Alpha-numeric Codes?
The buyers had to furnish a comprehensive application, as per Annexure II of the electoral bonds scheme for making a purchase. While many details were prescribed to be recorded, no mention was made of an alpha-numeric code. Likewise, there was no requirement to record the alpha-numeric number at the time of its receipt made by the SBI.
The design of the scheme did not want or require this alpha-numeric code to be noted either at the time of application or its redemption or at any other stage of the process or in any other internal process of the SBI.
The SBI, therefore, was not supposed to note this code at all.
I don’t know whether the SBI went beyond the scheme's stipulations and recorded this security code (not ID) somewhere in the system.
If it did, it was not only unnecessary, but also unlawful.
SBI’s Likely Response
The SBI’s response can be very plain and simple if it acted strictly as per the electoral bond scheme and did not note the alpha-numeric code of the electoral bonds unlawfully.
It can and should inform the Supreme Court that the electoral bonds had no unique ID. Further, the alpha-numeric security code embedded invisibly in each electoral bond was not noted anywhere in the SBI system, against the applicant-buyers data and/or the depositor-political parties data or otherwise.
In addition, though not necessary, the SBI can offer, if the apex court wants, to extract the alpha-numeric security code of all the electoral bonds encashed by discovering the same in ultra-violet light and provide that list.
This list, however, would serve no purpose as there would still be no connection between these 22,000 plus alpha-numeric numbers with the buyers of the bonds and the depositors.
If SBI Noted the Security Codes
There would be complications in store for the SBI if it unlawfully and unnecessarily recorded the alpha-numeric security codes against some or all applications of the purchase and/or deposit slips for the credit of the bonds.
The SBI would have, in my understanding, three options, although all difficult, in such a case.
First, the SBI can take cover under the scheme's guidelines and plead that the alpha-numeric security code was not any identifier and was not required to be noted, and request the SC not to insist on its furnishing.
Second, the SBI may offer to comply with the SC's directions by treating the alpha-numeric security code as an electoral bond ID. The compilation of this data of each electoral bond for each buyer and depositor would, in such a case, require some time, as indicated in the original SBI application asking for time until 30 June. The SBI may seek appropriate time from the SC to provide the requisite data.
Third, taking into account the fact that electoral bonds had no official ID and the alpha-numeric security code was noted unlawfully even if done in some or all cases, the SBI can go to the government requesting permission to disclose whatever alpha-numeric code data it has which establishes connections of the bonds with its buyers and depositors.
The government, in the third possible scenario, may either agree to the SBI’s suggestion or consider filing a petition in the SC for not treating the alpha-numeric security code as the bonds' ID, and request the withdrawal of the direction to the SBI to provide the data.
So, let's watch this space on 18 March. The SBI will have to file its response and clarify its position before the SC by that date. It will be interesting to see what the SBI says and what are the further directions of the SC in this matter.
(The author is the former Economic Affairs Secretary and Finance Secretary of India. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)
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