SC dismisses SBI's plea for extension in Electoral bonds case; stock falls 2%

Shares of State Bank of India (SBI) fell over 2% on Monday after the Supreme Court dismissed the public sector lender’s plea seeking an extension of time till June 30 to submit details of electoral bonds. The five-judge Constitution bench of the apex court, comprising Chief Justice of India DY Chandrachud, has given a day to SBI, the country’s largest lender, to furnish details regarding electoral bonds.

The SC has directed SBI to submit the details till the ‘business hours’ of March 12, while the Election Commission of India (ECI) has been asked to compile the information and publish the details in its official website before 5 pm of March 15, 2024. The SBI has been told to submit details of the bonds, including the name, date and denominations, as well as other information such as the name of the purchaser of the bonds.

Weighed down by the development, shares of SBI declined as much as 2.04% to hit an intraday low of ₹772 on the BSE, while the market capitalisation slipped to ₹6.9 lakh crore. Early today, the PSU bank shares opened higher at ₹788.65 against the previous closing price of ₹788.15 on the BSE. The stock rose to a high of ₹792.80 in early trade, while it declined 2.6% from day’s high after the court’s order.

Last week, electoral reforms non-profit, the Association for Democratic Reforms (ADR) had filed a contempt petition against SBI for not adhering to the March 6 deadline of the SC for disclosing the details of electoral bonds. On March 5, SBI had urged the top court to extend the deadline for submitting details on the purchase of electoral bonds to the ECI to June 30, after the General Elections are held.

In its plea to the apex court, the SBI had said it “intends to comply in full, with the directions issued.” “However, there are certain practical difficulties with the decoding exercise and the timeline fixed for it due to the stringent measures undertaken to ensure that the identity of the donors was kept anonymous,” it said, adding that matching of the donor to the donations made would be a complex process.

“Each political party was required to maintain a designated account in any of the 29 authorised branches. It was only in this account that electoral bonds received by that party could be deposited and redeemed. At the time of redemption, the original bond, the pay-in slip would be stored in a sealed cover and sent to the SBI Mumbai main branch,” the public sector lender had said.

On February 15, a five-judge Constitution bench of Chief Justice of India (CJI) DY Chandrachud and Justices Sanjiv Khanna, BR Gavai, JB Pardiwala and Manoj Misra struck down the Electoral Bond Scheme, calling it "unconstitutional".The apex court had asked SBI to issue details of the political parties, which received electoral bonds and all the particulars received and submit them to ECI by March 6. The apex court had asked the Election Commission to publish these details on its site by March 13, 2024.

The electoral bonds scheme, which was introduced through the Finance Act, 2017 by amending the RBI Act, the Income Tax Act and the Representation of People Act, was criticised for possible quid pro quo as corporates were able to secretly bankroll political parties under the scheme.