Electoral bonds worth Rs 282 crore sold before Bihar polls in October; most in Mumbai

Ahead of the Bihar elections, the Central government had approved the sale of the fourteenth tranche of electoral bonds between October 19 and October 28. A Right to Information response has revealed that electoral bonds worth over Rs 282.29 crore were sold during the period, of which 279 bonds were of Rs 1 crore each. At least 130 of these were purchased in Mumbai. The three-phased Bihar elections were held on October 28, November 3, and November 7.

These details came to light in the response given by the State Bank of India to a query filed by activist Lokesh Batra seeking “branch-wise and denomination-wise” details of the electoral bonds sold during the 14th tranche. SBI is the only bank authorised to issue such bonds. An electoral bond is valid for 15 days from the date of issue.

What are electoral bonds?

Electoral bonds are designed to be a bearer instrument like a promissory note, similar to a banknote, that is payable to the bearer on demand and free of interest. The bonds are issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh and Rs 1 crore and will be available at specified SBI branches. Arun Jaitley had pitched these as the alternative to cash donations made to political parties, in what the Bharatiya Janata Party claimed were a part of the efforts to bring transparency in political funding. The electoral bonds scheme was notified on January 2, 2018, and these donations are tax-deductible.

Jaitley had added that the electoral bonds would not bear the name of the donor, though the details would be available with the bank. But the political party might not be aware of who the donor is, However, as revealed by several investigations by The Quint, each electoral bond has a hidden alphanumeric code, which is known to the bank. So, the donations are not anonymous and it is easy for the party in power to find out who made the donations to which political party.

One of the issues with the bonds is that donors of amounts below Rs 20,000 are allowed to be kept hidden legally and according to the Association for Democratic Reforms (ADR), 51% of all unknowns funds were donations below Rs 20,000.

The RBI Governor Urijit Patel had strongly advised against electoral bonds as these could lead to money laundering, but the finance ministry under Jaitley overruled his concerns. Even the Election Commission had advised against it. A petition on electoral bonds has been filed at the Supreme Court, but the matter is still pending.

What do the latest RTI responses reveal?

In the latest RTI responses, it was stated that Rs 282,29,01,000 worth of bonds were sold by nine branches of the SBI – Bhubaneshwar, Chennai, Gandhinagar, Hyderabad, Jaipur, Kolkata, Mumbai, New Delhi, and Patna.

Of these, the Mumbai branch sold the highest amount of electoral bonds worth Rs 130 crore followed by Chennai (Rs 60 crore), Kolkata (Rs 36 crore), Hyderabad (Rs 20 crore), Bhubaneshwar (Rs 17 crore), Delhi (Rs 11.99 core), Jaipur (Rs 5crore), Gandhinagar (Rs 1.5 core) and Patna (Rs 80 lakh).

Mumbai sold 130 electoral bonds of Rs 1 crore each, Chennai sold 60 such electoral bonds, 35 in Kolkata, 20 in Hyderabad, 17 in Bhubaneswar, 11 in New Delhi, 5 in Jaipur, and one in Gandhinagar. Kolkata sold the highest number of bonds (10) worth Rs 10 lakh each, followed by New Delhi (9), Patna (8), and Gandhinagar (5). Bhubaneshwar, Chennai, Hyderabad, Jaipur, and Chennai did not sell bonds in the Rs 10 lakh denomination. New Delhi is the only branch that sold nine bonds of Rs 1 lakh denomination each.

The maximum amount of Rs 90 crore was encashed at the Hyderabad branch, followed by Chennai (Rs 80 crore), Bhubaneshwar (Rs 67 crore), New Delhi (Rs 26.89 crore), Kolkata (Rs 16 crore), and Patna (Rs 2.4 crore). Only Rs 1,000 was not encashed and this was transferred to the Prime Minister’s National Relief Fund on November 12.

BJP bags maximum electoral bonds

According to the findings of the Association for Democratic Reforms, the scheme has benefited the ruling BJP the most. Of the Rs 222 crore issued in the maiden tranche of the scheme in March 2018, BJP got Rs 210 crore.

Ahead of the Lok Sabha elections, the BJP had raised Rs 2,410 crore through electoral bonds and they had gotten Rs 1,451 crore in 2018-19, while Congress had raised Rs 383 crore during the same period.