This article was first published on The India Cable – a premium newsletter from The Wire & Galileo Ideas – and has been republished here. To subscribe to The India Cable, click here.
The media is celebrating the ‘slap on the face’ of the State Bank of India in the Electoral Bonds case but when the dust settles, could the average Indian citizen be left smarting?
The purpose of the Supreme Court’s order was to make known which purchaser of bonds ‘donated’ how much to which party. The ‘harsh’ orders, now given to the SBI, to quickly collate and reveal who purchased the bonds and who encashed them, without linking the buyers and the beneficiaries, are directions to provide data that may not serve the purpose.
And the further order that the EC publish what may be more useful information would not, either.
This is because the exercise of linking each bond with its purchaser and beneficiary can be carried out only by the SBI.
What is more important, of course, is that linking the buyer with the beneficiary would not take three months, as claimed by the SBI.
The reason is that any money value security that a bank issues has an identifier, to enable accounting and audit and prevent fraud. If this had not been there, the value of bonds encashed could have been many times the value of the bonds purchased.
The outline procedure is that on issue of a bond, or at the end of the day, the issuing branch has to send a list of the bond’s serial numbers, with value to the other branches. The name of the issuer, of course, not being mentioned to preserve anonymity. The serial number being visible only under UV light is merely a cosmetic feature.
This procedure would have been necessary so as to enable the encashing branch, when the bond is presented, to verify that the value has not been tampered with.
The serial number of the bond issued also needs to be noted with the KYC documents of the purchaser of the bond. This is both for audit and to satisfy a claim by a purchaser, if made, that a bond was paid for a different value or misappropriated.
With this data in place, as it must be, it is not a major task to connect the purchaser and the beneficiary of each bond, upon the orders of the court, as is provided for in the scheme.
To illustrate: There are approximately 22,000 bonds. Entering the data of purchaser, value and serial number of each bond, available in the respective sealed envelope, into a spreadsheet, cannot take more than a minute, with two persons working.
22,000 bonds would hence take 22,000/60= 366 hours.
The second task, of entering the data of who encashed each bond would take less time, as there are very few beneficiary parties, and only a code to identify the party need be entered, or the bonds could be sorted party-wise before data entry. Say this takes 234 hours.
The total time is 366+234 = 600 hours.
If 20 teams of two persons are deployed, the job will be over in 10 hours.
Getting the information of how much each donor gave each party will now take a few minutes.
This is a conclusion that any (competent) bank employee, who has dealt with the issue of demand drafts, public issues, etc. and then with reconciliation of accounts, would have arrived at instantly.
The bank’s advocate tried to say that linking the donor with beneficiary is what was required to be done. Instead, the court read their order of February 15 as only listing out the donors and the receivers, without the connections and ordered that this be done by the end of the next day.
Instead, the court should have questioned the bank on why the exercise needs three months, and the order could have been to put out the real information in 48 hours, if not in 24.
Does it seem that SBI is off the hook? I don’t think so.
A further order from the court, of course, is possible, on application, if not suo motto.
The author is a retired civil servant who also spent some years as an SBI officer.
