Electoral bonds case: What are unique alphanumeric numbers?

Notably, by mandating the disclosure of data related to electoral bonds, the SC aims to achieve several objectives:

Enhanced Accountability: Making information about political contributions public increases the accountability of political parties and donors. This transparency can help deter corruption and ensure that parties are more accountable to the electorate.

Promotion of Public Scrutiny: Access to data on electoral funding allows the public to scrutinise the financial transactions between parties and donors. This scrutiny can help identify any undue influence or conflicts of interest and hold parties accountable for their actions.

Also Read | Electoral Bonds: Why SC interpreted and clarified its own judgment twice in a week

Preservation of Democratic Values: Transparency in political funding is crucial for upholding democratic principles. By ensuring that the electoral process is transparent and fair, the top court helps preserve the integrity of the democratic system.

Prevention of Malpractice: Disclosure of electoral funding data can help prevent malpractices such as money laundering, quid pro quo arrangements, and illicit financing of political activities. This can contribute to a cleaner and more ethical political environment.

SC Mandates Detailed Electoral Bond Disclosure

Also, the apex court’s directive requires the SBI to provide comprehensive data on electoral bonds purchased and redeemed since April 12, 2019, including alphanumeric and serial numbers. This data must be disclosed to the Election Commission by March 21, 2024, ensuring timely transparency and accountability in political funding.

Also Read | SC refuses to hear industry bodies' plea against revealing poll bond numbers

SC Seeks Clarification from SBI on Alphanumeric Identifiers

On March 15, the SC served a notice to the SBI, the country’s largest bank, instructing it to clarify the reasons for its non-disclosure of unique alphanumeric identifiers as per prior directives. The court stressed the essential nature of SBI's obligation to provide this information, highlighting its duty-bound responsibility in this matter.

Also Read | Electoral bonds: Bajaj Finance, Muthoot Finance among 10 NBFCs that donated Rs 127 crore to political parties

Experts argue that the absence of alphanumeric details makes it challenging to determine any potential quid pro quo arrangements, a concern underscored by the February 15 judgment, between the donor and recipient.

What are Unique Alphanumeric Numbers?

(1) Each bond is assigned a unique alphanumeric code. Disclosure of these codes by the SBI would enable the linking of donors with their respective recipient parties.

(2) Reports say, each electoral bond issued by the SBI bears a distinctive alphanumeric code, visible only under specific lighting conditions. This code has the potential to correlate each donation with the political party that received it.

(3) At present, the SBI has provided data to the poll panel in two separate categories: one containing information about donors who purchased bonds, and the other containing details about recipients who encashed them. However, according to reports, there is a missing link between these two sets of data.

(4) In April 2018, the Quint's investigation unveiled the presence of hidden alphanumeric numbers on electoral bonds, undetectable to the naked eye. The report highlighted the potential of these unique numbers to connect purchasers of electoral bonds with the political parties to which they made donations.

(5) The SBI had told the Quint that the alphanumeric number on electoral bonds served as a "security feature," asserting that there was no mechanism in place to establish a direct connection between individual donors and the political parties they supported.

(6) Establishing a direct correlation between the purchaser and redeemer of each electoral bond can only be achieved with the availability of the unique alphanumeric number associated with each bond.

(7) In April 2019, the government stated that electoral bonds, intended for anonymous political contributions, incorporate a serial number as a counterfeiting deterrent. However, it clarified that this serial number is inaccessible to everyone, including government entities. Emphasising donor anonymity, the finance ministry had highlighted in a statement that the random serial number on the bonds is invisible to the naked eye and is not recorded by the issuing bank, the SBI.

(8) Former finance secretary Subhash Chandra Garg, who served as economic affairs secretary during the formulation of the Electoral Bond Scheme in 2017, stated according to Indian Express that the unique code on each bond was implemented as a security feature. He clarified that this code was not recorded either at the time of sale or at the time of depositing by a political party.

In a nutshell, the lack of alphanumeric details complicates the ability to pinpoint the exact origins of political contributions and the individuals or entities receiving such donations. As a result, the absence of alphanumeric information hampers efforts to ensure thorough transparency and accountability in the electoral funding process.