SC asks SBI to stop issuing electoral bonds 'immediately'
The Supreme Court on Thursday struck down the Electoral Bonds Scheme (EBS), calling it "unconstitutional." The court directed the State Bank of India to halt the issuance of electoral bonds without delay. It also asked the bank to furnish a report on all bonds acquired since the court's interim order of April 12, 2019, to the Election Commission of India (ECI) by March 6. Additionally, the court instructed the ECI to publish these details on its website by March 13.
Why does this story matter?
In January 2018, the Centre announced that the EBS would allow citizens to purchase bonds from the SBI to support political parties. The scheme enabled a qualifying political party to redeem the bonds exclusively through a bank account. The EBS has been embroiled in controversy ever since it was launched, with several opposition parties accusing the Bharatiya Janata Party (BJP) of keeping the scheme "opaque and secretive."
Corporate contributors in electoral bonds must be disclosed: SC
In its judgment, a five-judge bench deemed arbitrary the changes in law allowing unlimited funding to political parties. "Information about corporate contributors through Electoral Bonds must be disclosed as the donations by companies are purely for quid pro quo purposes," the SC said. "EC must share information on its website. Electoral bonds which have not been encashed shall be returned," the bench added.
'Citizens have right to know about funding to political parties'
While delivering the judgment, Chief Justice of India (CJI) DY Chandrachud said that the citizens have a right to know about the funding of political parties and it is essential for the electoral process. He added that financial support to a political party can lead to "quid pro quo arrangement." When notified, the scheme was pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency to political funding.
What are electoral bonds
Electoral bonds are a means for anonymous Indian citizens/corporations to donate money to political parties. These bonds are available in multiples of Rs. 1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh, and Rs. 1 crore and can be purchased at approved SBI offices. The donor could give these bonds to a party or parties of their choice, which could opt to cash in such bonds within 15 days. This approach assured that the donor's name remained anonymous.
