The Reporters’ Collective is a group of like-minded journalists focused on reportage that keeps the powerful accountable. The collective has consistently produced pathbreaking reports on developments and issues that put the spotlight on those in power. The Reporters’ Collective has also shed light on how India’s political economy and governance functions. In recent times, this group of journalists has come out with a series of “deep-dive” stories on the Electoral Bond revelations. The AIDEM is reproducing some of these stories in different languages with due acknowledgment.

The Union government gave lightning-quick sanction to break electoral bond rules to allow ruling party BJP to encash expired bonds, just before the 2018 Karnataka elections, show new disclosures by the Election Commission. 

The Union Finance Ministry headed by late BJP politician Arun Jaitely forced the State Bank of India to accept electoral bonds of Rs 10 crore after his partymen walked in to the bank to encash expired electoral bonds.

The Reporters’ Collective reported in 2019, based on official records accessed by Commodore Lokesh Batra (Retd.), that SBI had allowed an unknown political party to encash electoral bonds worth Rs 10 crore even though it came two days after the legally mandated 15-day period to encash bonds had ended.

In 2019, when The Collective reported it, we were unaware which political party had gained from the Union Finance Ministry’s generosity. 

But we knew this: “X” party brought expired bonds to the Delhi branch of SBI on May 23, 2018. After a series of superfast correspondence between the SBI Delhi branch, its corporate headquarters in Mumbai and the Union Finance Ministry mandarins, the expired bonds were encashed by “X” party on government’s orders. 

Now, BJP’s own disclosures made public by the Election Commission of India show that the Union Finance Ministry’s creative interpretation of rules and illegal orders to SBI were made to allow the party to encash Rs 10 crore worth of expired bonds.

The Bond Tale

According to a report by SBI to the Union Finance Ministry, on May 23, 2018, “some EB holders” with bonds worth Rs 20 crore went to SBI’s main branch in New Delhi. EB or Electoral Bond holders refers to representatives of political parties holding the physical bond that must be deposited in a political party’s account.

Half the bonds had been bought on May 3, 2018 and the other half on May 5, 2018. Both, SBI noted, had expired as their 15-day period of redemption had lapsed.

But the bond holders requested that the 15 calendar-day rule be bent, and the bonds be redeemed anyway as they were being deposited within 15 working days, said the report.

SBI’s New Delhi branch informed its Mumbai corporate headquarters on the same day, documents show. The next day, on May 24 2018, bank’s then deputy managing director Mrutyunjay Mahapatra wrote on behalf of SBI Chairman Rajnish Kumar to the Union Finance Ministry asking whether they should allow holders to redeem expired bonds.

The ministry acted with alacrity. The same day, then deputy director in the economic affairs ministry Vijay Kumar, responded, “This is clarified that the stipulation means a total of 15 days, including non-working days in between…”

Hence, the bonds had lapsed and as per the rules, the money was to be donated to the Prime Minister’s National Relief Fund, an official, non-partisan fund used for charitable works, and to provide immediate relief to those affected by natural disasters.

But Kumar wasn’t done.

He added, “As some amount of lack of complete clarity may have been witnessed in the bonds issue in last windows, SBI may grant credit to such bond holders of bond purchased before 10th May, 2018 if the bonds were deposited in 15 working days.” He said, “No such accommodation will be available in future.”

This letter, approved by the secretary of the department of economic affairs, S.C. Garg, the highest-ranking official in the department, was sent to the SBI chairman the same day.

The SBI headquarters informed its New Delhi main branch, and before the day was over, the political party, or parties, involved were allowed to redeem the expired bonds worth Rs 10 crore, that were bought on 5 May 2018.

The other tranche, bonds worth Rs 10 crore bought on 3 May 2018, was sent to the PM’s Relief Fund, the documents show, as they were outside the Union Finance Ministry’s exceptional “accommodation.”

While we now know the BJP was the beneficiary of these bonds, the donor’s identity still remains a mystery.

The breach of electoral bond rules didn’t end here. Even the tranche in which the BJP got these bonds went against the scheme. 

According to the rules notified in January 2018, there were to be four 10-day windows in January, April, July and October. The Prime Minister’s Office in 2018 ordered the Finance Ministry to break its rules and open an extra “special” 10-day window for bond sale before the Karnataka elections.

The PMO’s request was first recorded in files by Union Finance Ministry officials in April 2018 – a mere three months after the rules were notified. This exception to rule became a practice. For example, a special 10-day window was opened in December 2022 before the Gujarat state elections.

On 18 March, the Supreme Court directed the State Bank of India to disclose all available data on electoral bonds, including the unique alphanumeric identity encoded in each bond