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Pointing to a concentration of political funding, five cities, Mumbai, Kolkata, Hyderabad, New Delhi and Chennai, accounted for nearly 90% of all electoral bonds sold so far, while the tech capital of India, Bengaluru, accounted for just over 2% of total sales, as per State Bank of India data accessed under the Right to Information Act by The Indian Express.
On May 4, SBI said that electoral bonds worth Rs 12,979.10 crore had been sold since the start of the scheme in 2018 until the most recent tranche, the 26th, of sales held in April.
In the same period, Rs 12,955.26 crore in electoral bonds had been encashed by political parties. The SBI reply to the RTI application stated that 25 political parties opened designated bank accounts with the bank to redeem these bonds under the scheme that enables anonymous political funding by Indian citizens and corporates.
Since 2017, the Supreme Court has been hearing a batch of petitions challenging the scheme’s validity on various grounds. The court is yet to decide whether the case should be sent to a Constitution Bench. As per the court’s automated listing system, the next hearing is scheduled for May 9.
Mumbai, the country’s financial capital, accounted for 26.16% of the total electoral bonds sold so far, the highest among the 29 SBI branches where the scheme is offered, with Rs 3,395.15 crore.
Kolkata, Hyderabad, New Delhi and Chennai rounded out the top five with Rs 2,704.62 crore (20.84%); Rs 2,418.81 crore (18.64%); Rs 1,847 crore (14.23%); and Rs 1,253.20 crore (9.66%) respectively in sales.
Bengaluru, the capital of election-bound Karnataka, was in seventh place with Rs 266.90 crore in sales or 2.06% of the total, after Bhubaneswar that had Rs 407.26 crore or 3.14% of the sales.
While sale data shows that funding to parties is flowing mainly from five big cities, when it comes to redemption of the electoral bonds, the New Delhi branch of SBI is the preferred choice.
Of the total amount of bonds redeemed so far, 64.55% or Rs 8,362.84 crore was encashed in New Delhi, where national parties are likely to have their accounts.
Hyderabad was a distant second with 12.37% (Rs.1,602.19 crore) followed by Kolkata in third place with 10.01% (1,297.44 crore), Bhubaneswar with 5.96% (Rs 771.50 crore) and Chennai with 5.11% (Rs.662.55 crore). Although Mumbai accounted for over 26% of all sales, it had only 1.51% of all electoral bonds redeemed.
The Electoral Bond Scheme was launched in January 2018 and the first tranche of sales was held in March that year. The scheme was initially introduced for a period of 10 days each in January, April, July and October and an additional 30-day period for a year with Lok Sabha elections. In November 2022, the Finance Ministry amended the scheme to allow another 15 days of sales in any year with an Assembly election.
To redeem electoral bonds, a party needs to have a designated bank account with one of the 29 authorised SBI branches and to open an account, the party needs to have secured at least 1% of the votes in the most recent Lok Sabha polls, or Assembly elections in case of a state party.
Since the scheme is meant for anonymous donations, the SBI does not disclose which party has an account in which branch.
