Editorial     

Published: March 31, 2024
Updated: March 31, 2024

SBI and its electoral bond(age)!

It is really unfortunate that the State Bank of India, the largest commercial bank in the country and a Fortune 500 lister, has behaved in a totally irresponsible manner on the electoral bonds issue. When the Supreme Court ordered it to submit details about the bonds, the banking behemoth, which has a hoary heritage of over two centuries, showed its inability and/or unwillingness to comply with the order speedily. Significantly, it requested an extension of the deadline till June 30 to disclose donor details (even the aam aadmi would have read between the lines of the ‘null’ effect of the SBI giving details of the electoral bonds scheme after the general elections are done and dusted).

A furious apex court issued a stern warning to the bank’s top brass. SBI initially suggested it would need several months to ‘collate’ donor details, then revised its ‘estimate’ to a few weeks, and eventually to a matter of days. While the aam aadmi laughed at the inefficiency of the country’s largest bank, more knowledgeable observers had serious misgivings about the bank’s independence and sincerity on an issue of national importance.

To all but the deliberately blinkered, it seemed clear enough that the SBI was working as a handmaid of the government and was dancing to the tune of the Union finance ministry. The Modi government was apparently not keen that the country at large should learn the identity of the donors and recipients of the bonds. The SBI-bonds tamasha highlights the growing worries about the mounting government pressure on, and institutional control of, the banking sector.

If the top officials of the bank had submitted the required details immediately, they would have stood tall in the eyes of millions of Indians. But in order to remain in the good books of the powers that be and to save their positions, they apparently kowtowed to the authorities.

It’s worth noting that during the infamous Emergency, the then Prime Minister Indira Gandhi had ordered N Vaghul, Chairman of ICICI Bank, to take some unethical and illegal decisions. Mr Vaghul refused to do so and stepped down from his post. How many Vaghuls can one find in the Indian banking sector today?

But this is not the case of SBI alone — the Modi government seems bent on systematically destroying key Indian institutions. From the Supreme Court to the RBI, and from CBI to the Election Commission, various pillars of the Indian democratic system are facing the threat of subversion. It may be remembered that over five years ago, Viral Acharya, the then deputy governor of the Reserve Bank, had called out the Modi government for impinging upon the independence of the central bank of the country. Mr Acharya had then warned that “governments that do not respect central bank independence will sooner or later incur the wrath of the financial markets, ignite economic fire and rue the day they undermined important regulatory institutions.”

Currently, it seems to many that key institutions – pillars of the republic – are facing overbearing pressure from the authorities. Some have raised the banner of revolt, while some have buckled under. Although institutions have always had to negotiate with political rulers and there have been periods in India’s past when things came to a flashpoint, never before has such a sweeping discontent been felt by the people. It poses a danger for the country’s democracy if institutions like the Supreme Court, the RBI, the Election Commission, the CBI, SEBI and SBI are pressured to function for political ends.

Experts wonder whether the electoral bonds saga will lower the trust of large and retail investors and 48 crore account holders in SBI? What should ordinary citizens make of this episode? Will they wonder whether the bank most Indians trust their life savings with is truly independent, reliable and trustworthy?