A report by the SBI called for more reforms in the banking sector in India. File
| Photo Credit: Reuterss

As the Central government prepares for the Union Budget presentation on July 23, a research report by the State Bank of India (SBI) has highlighted crucial areas that need attention to drive sustainable economic growth and development in the country.

The report emphasises adherence to fiscal prudence while continuing on the path of fiscal consolidation, suggesting a fiscal deficit target of around 4.9%. “Government should focus on adherence to fiscal prudence and continue on the fiscal consolidation path, but at the same time refrain from obsessing too much over the fiscal stance,” the report stated.

To provide relief in tax structures, the report advocates aligning personal income tax rates with corporate taxes and gradually transitioning all payers to the New Tax Regime.

Additionally, it recommended considering tax parity for bank deposits to attract more savings and boost household financial savings.

For the agriculture sector, it highlighted the need to address issues like financing, livelihood support and the Agri Credit Guarantee Trust Fund.

The report also noted that the Minimum Support Price (MSP) has become politicised and suggested exploring alternatives as the current MSP policy reduces trade and export competitiveness. “The issues innate to MSP mechanism viz. needless politics, disincentivising private investment, neglect of non-MSP crops, reduction in export competitiveness and burden of trade disputes alternative mechanism needs to be looked into vigorously, viz. obligation to private parties for buying crops at MSP,” it said.

The report also suggested developing a comprehensive mineral strategy, especially for critical minerals, to ensure mass employment and secure the supply chain from exploration to recycling.

It called for more reforms in the banking sector in India, including the divestment of public sector banks (PSBs) and the stake sale in IDBI Bank. “After a decade of transformative changes, the Indian banking system stands much healthier ready to scale up to meet emerging challenges as the country embarks on the Viksit Bharat sojourn” it said. It also recommended changes to the Insolvency and Bankruptcy Code and the promotion of Production Linked Incentive (PLI) schemes for MSMEs to reduce import dependency.

The report also noted that by incorporating these suggestions into the upcoming Budget, the Government can lay a strong foundation for sustainable growth, promote financial inclusion, and drive economic resilience in the post-pandemic era.

State Bank of India (SBI) Managing Director (R&DB), Challa Sreenivasulu Setty. File.
| Photo Credit: NAGARA GOPAL

Government appointment selection panel FSIB on June 29 selected senior-most managing director Challa Sreenivasulu Setty for the position of Chairman of country’s largest lender State Bank of India (SBI).

Mr. Setty, who was appointed managing director in January 2020, currently looks after International Banking, Global Markets and Technology verticals.

He will succeed Dinesh Kumar Khara, who will be superannuating on August 28, when he turns 63, the upper age limit for the position of SBI Chairman.

Financial Services Institutions Bureau (FSIB), the headhunter for directors of state-owned banks and financial institutions, interviewed three candidates on June 29, 2024 for the position.

“Keeping in view their performance in the interface, their overall experience and the extant parameters, the Bureau recommends Challa Sreenivasulu Setty for the position of Chairman in SBI,” FSIB said in a statement.

As per the convention, the chairman is appointed from a pool of serving managing directors of SBI. Usually, senior-most managing director becomes chairman of the bank.

The final decision on FSIB recommendation would be taken by the Appointments Committee of the Cabinet headed by Prime Minister Narendra Modi.

Mr. Setty, who also headed various task forces/committees formed by the Government of India, had earlier looked after the retail and digital banking portfolio of the bank.

A Bachelor of Science in Agriculture and also, a Certified Associate of Indian Institute of Bankers, he started his career with SBI in 1988 as a Probationary Officer.

Across a career spanning over three decades, he has rich experience in corporate credit, retail, digital and international banking and banking in developed markets.

Mr. Setty has held key assignments in State Bank of India, including Deputy Managing Director – Stressed Assets Resolution Group, Chief General Manager and General Manager in Corporate Accounts Group, Deputy General Manager in Commercial Branch, Indore and VP & Head (Syndications) in SBI, New York Branch.

FSIB is headed by Bhanu Pratap Sharma, former secretary of Department of Personnel and Training (DoPT).

The members of the government-appointed selection panel are Financial Services Secretary, Department of Public Enterprises Secretary and an RBI Deputy Governor.

Other members of the headhunter are Animesh Chauhan, former chairman and MD of erstwhile Oriental Bank of Commerce, RBI’s ex-executive director Deepak Singhal, and Shailendra Bhandari, former MD of erstwhile ING Vysya Bank.

State Bank of India (SBI) said it had raised ₹10,000 crore at a coupon rate of 7.36% through its fifth infrastructure bond issuance.

“The issue attracted overwhelming response from investors with bids in excess of ₹19,884 crore and was oversubscribed by around four times against the base issue size of ₹5,000 crore,” the bank said in a statement.

“The total number of bids received was 143 indicating wider participation with heterogeneity of bids. The investors were across provident funds, pension funds, insurance companies, mutual funds and corporates,” it added. 

The proceeds of bonds will be utilised in enhancing long-term resources for funding infrastructure and affordable housing segment.

“Based on the response, the bank has decided to accept ₹10,000 crore at a coupon rate of 7.36% payable annually. This represents a spread of 21 bps over the corresponding FBIL G-Sec par curve,” SBI said. 

With the current issuance, the total outstanding Long-Term Bonds issued by the Bank is at ₹49,718 crore.

SBI Chairman Dinesh Khara said that this issuance would help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor.

Twelve of the 20 new companies which bought electoral bonds were from Hyderabad.
| Photo Credit: Akash Dhage/Unsplash

Despite companies in existence for less than three years not being allowed to make political contributions — even through the electoral bonds route — data shows that at least 20 such newly incorporated firms purchased poll bonds worth about ₹103 crore (Table 1).

At the time when they purchased their first electoral bonds, five of these firms were in existence for less than a year, seven of them were a year old and the eight others had only completed two years. Notably, many of these firms were started in 2019 when the Indian economy went through recession or during the middle of the pandemic and bought electoral bonds worth crores of rupees just months after incorporation.

Also read: Electoral bonds data | Full list of donors and recipient political parties

The ban on companies making political contributions within three years from incorporation has been in existence for nearly four decades. In 1985, the Parliament amended Section 293A, lifting the ban on political contributions by firms subject to a few conditions. One of the conditions was that the firms should not be owned by the government and should not be less than three years old. This clause was retained under Section 182 of the Companies Act, 2013. When Section 154 of the Finance Act, 2017, amended Section 182, just before the introduction of electoral bonds, this clause was again retained. However, the amendment deleted the first proviso by which the amount donated by a company was capped at 7.5% of its average net profit during its previous three financial years. The prohibition on companies making donations to political parties in their first three years continued. According to Section 182 of the Companies Act 2013, if a firm makes a donation in contravention to the provisions, “the company shall be punishable with fine which may extend to five times the amount so contributed and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed”.

Table 1 | The table shows the names of the 20 firms which purchased the electoral bonds (EBs), within three years of their incorporation. The date of incorporation of these companies, the date on which they purchased their first poll bond, the difference between the two dates along with the total worth of bonds purchased by these firms is mentioned in the table. 

Table appears incomplete? Click to remove AMP mode

Also read: Electoral bonds data | 55 firms’ purchase exceeded 7.5% cap in 2022-24, lion’s share went to BJP

12 of these 20 companies were headquartered in Hyderabad (Table 2). Together these 12 companies donated ₹37.5 crores, and close to 75% of which was encashed by the BRS, with the rest divided among the TDP, the Congress and the BJP. Two companies in Hyderabad — Tsharks Infra Developers Private Limited and Tsharks Overseas Education Consultancy Private Limited — both incorporated in 2023 — purchased ₹7.5 crore worth of bonds within months of getting incorporated and donated it to the BRS. Among the rest, HH Iron and Steel Private Limited, headquartered in Coimbatore, gave ₹15 crores to the BJP and five crores to the BJD. Their first electoral bond purchase was done just days short of turning three years old. Askus Logistics Private Limited, incorporated in November 2021, bought its first electoral bond within 1.5 years of its incorporation and donated ₹22 crores. This was encashed by the DMK, AITC and the RJD. Besseggen Infotech LLP, incorporated in May 2018, bought bonds worth ₹11.5 crores, with their first purchase done two years and ten months into their existence.

Table 2 | The table shows the city-wise split of the 20 companies.

Table 3 | The table shows the party-wise split of the encashments of the EBs purchased by the 20 companies.

Electoral bonds data | New firms bought crores of electoral bonds within months of formation

The three-year rule was retained to prevent shell companies from making political contributions. When the first proviso, which prescribed the 7.5% cap, was removed in 2017, the Election Commission of India had warned that this may lead to the use of “black money through shell companies”. The RBI had also flagged the possibility of firms misusing bearer bonds for money laundering.

The list of 20 firms is not exhaustive as it does not include the firms which were newly incorporated after mergers and amalgamations. The list also does not include firms that are not in the MCA

With inputs from Rebecca Rose Varghese

Watch our Data video:Electoral bonds banned: Which party benefitted the most while it existed?

New Delhi:

Weeks after it was pulled up by the Supreme Court on the electoral bonds issue, the State Bank of India has refused to reveal details of the Standard Operating Procedures issued to its branches regarding sale and redemption of bonds under the now-scrapped scheme.

Transparency activist Anjali Bhardwaj had filed a petition under Right To Information (RTI) Act, seeking information about the SOPs laid down by the bank for the electoral bonds scheme.

In a response by SBI’s Deputy General Manager M Kanna Babu, the bank has said the SOPs were internal guidelines and information regarding them are exempted from disclosure under the Section 8(1)(d) of the RTI law.

This section relates to “information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that larger public interest warrants the disclosure of such information”.

The petitioner has said in a statement that the state-run bank has “blandly invoked the exemption clause without demonstrating how the disclosure would ‘harm the competitive position of a third party’. The denial will be challenged in appeal, she has said.

The development comes weeks after the Supreme Court pulled up SBI for the delay in sharing details of electoral bonds with the Election Commission of India. Following the landmark verdict in February that scrapped the poll bonds scheme, the bank had sought three months’ time to share the data. The court, however, refused its request and asked them to make the data public within two days. The court also warned that it will initiate contempt proceedings against the bank if it did not disclose the data at the earliest.

Soon after the bank shared the data, it came in for another round of reprimand from the court. The court asked why the bank had not disclosed the bond numbers. Thereafter, the bank shared the details and filed an affidavit declaring that it had disclosed all information related to the poll bonds scheme.

In its February 15 judgment, the Supreme Court scrapped the electoral bonds scheme on the grounds that it violates the citizens’ right to information. The scheme, Chief Justice of India DY Chandrachud said, was unconstitutional and arbitrary and may lead to a quid pro quo arrangement between political parties and donors.

The Constitution bench of five judges held that the stated objective of fighting black money and maintaining the confidentiality of donors cannot defend the scheme. Electoral bonds, the court said, are not the only way to curb black money.

State Bank of India (SBI) has announced increase in its annual maintenance charges associated with certain category of debit cards. The new rates will be effective from April 1, the first day of the new financial year, as per a release posted on SBI website. The new charges will be applicable on Classic/Silver/Global, Yuva/Gold, Platinum and Pride/Premium Business categories of debit cards, the website further said. The bank has listed the new charges in a tabular form for the convenience of its customers.

The annual maintenance charges have been increased by Rs 75 across various categories, the website shows.

The public lender has also mentioned other fees associated with debit cards. These include issuance and replacement of debit cards.

The issuance charges vary depending on the type of card, ranging from Nil for Classic, Silver, Global, and Contactless debit cards to Rs 300 plus GST for Platinum debit cards.

The customers will also have to pay for services like debit card replacement (Rs 300 plus GST), duplicate PIN/regeneration of PIN (Rs 50 plus GST), and international transactions, as mentioned on the SBI website.

The bank has mentioned that all charges are subject to an 18 per cent GST.

The bank had in February announced changes in its Minimum Day Bill Calculation process for its credit cards. The change had come into effect from March 15 and the bank informed all its customers about it through e-mails.

On its website, the bank also said that the accrual of reward points on rent payments will be discontinued for some credit cards starting April 1, 2024.

SBI is the second largest credit card issuer in the country, with a user base of over 18 million cards.

New Delhi:

The Bharatiya Janata Party was the largest beneficiary of electoral bonds between April 2019 and January 2024 – companies donated Rs 5,594 crore in that period – the Election Commission of India said this week. The BJP pocketed over three times the amount (Rs 1,592 crore) the Trinamool Congress took home and more than four times the amount donated to its arch-rivals Congress (Rs 1,351 crore).

Fourth on the list was former Telangana Chief Minister K Chandrashekar Rao’s Bharat Rashtra Samithi, which was dumped out of power by the Congress in November; the BRS got Rs 1,191 crore.

Odisha’s Biju Janata Dal, the Dravida Munnetra Kazhagam from Tamil Nadu, and the YSR Congress Party and Telugu Desam Party from Andhra Pradesh are next on the list; the BJD got Rs 775 crore and the DMK got Rs 632 crore, while the TDP raked in Rs 211 crore and the YSRCP Rs 128 crore.

The last big name on the list is the Aam Aadmi Party, which got Rs 65 crore via electoral bonds.

READ | Electoral Bonds Codes Out, Donors Can Be Matched With Parties

Exactly how much each party received through the contentious electoral bonds – in a landmark verdict last month the Supreme Court called the scheme “unconstitutional” – has come to light after the State Bank of India released the alphanumeric codes that match donors to parties.

The SBI – hauled up by the court for first appearing to delay release of electoral bonds data and then neglecting to provide matching codes – submitted the data to the Election Commission on Thursday.

Under the rules, the SBI was the only bank allowed to issue electoral bonds; this, of course, was only till the top court ordered the scheme be scrapped and the public sector bank to stop selling bonds.

Earlier the SBI had released two lists – one of donors and the other of receiving political parties – but without the codes it was not possible to see which donor had given how much to which party.

What was apparent then was that companies like Megha Engineering & Infrastructure Ltd., Qwik Supply Chain Pvt. Ltd., Vedanta, and the Bharti Group were among the top corporate donors.

How Much Did BJP Get From Electoral Bonds?

With the codes, it is now clear the BJP received Rs 584 crore from Megha Engineering & Infrastructure Ltd., and Rs 375 crore from Qwik Supply Chain. Vedanta donated Rs 226 crore and Airtel Rs 183 crore. Other major donors included real estate giants DLF, which gave Rs 133 crore.

Also, Hyderabad-based Navayuga Engineering Company Ltd. – building the tunnel in Uttarakhand’s Silkyara, a portion of which collapsed last year – purchased Rs 55 crore worth of bonds for the BJP.

READ | Firm Building Uttarakhand Tunnel That Collapsed Gave 55 Crore To BJP

How Much Did Trinamool Get From Electoral Bonds?

The party second on the list of beneficiaries – Mamata Banerjee’s Trinamool – received Rs 542 crore from Future Gaming & Hotel Services Pvt. Ltd., which is a Coimbatore-based lottery company. It is owned by a Colombian businessman called Santiago Martin, who runs lottery companies worldwide.

READ | Electoral Bonds: Trinamool Biggest Beneficiary Of ‘Lottery King’ Donor

Future Gaming is, in fact, the biggest buyer of electoral bonds; it has donated Rs 1,368 crore between April 2019 and January 2024. The company was in the headlines in July 2019 after the Enforcement Directorate attached assets worth Rs 250 crore in an alleged money laundering scam.

Besides Trinamool, Future Gaming also gave Rs 509 crore to the DMK and around Rs 160 crore to the YSR Congress Party, as well as Rs 100 crore to BJP, the data showed.

Meanwhile, the Trinamool Congress also received Rs 281 crore from Haldia Energy and Rs 90 crore from Dhariwal Infrastructure Pvt. Ltd. IFB Agro Industries Ltd., a beverage company with its office in Kolkata, donated Rs 42 crore. Chennai Green Woods, a real estate firm, gave Rs 40 crore.

How Much Did Congress Get From Electoral Bonds?

Meanwhile, the Congress – which today saw the Delhi High Court reject its challenge to re-assessment proceedings by the Income Tax Department – received Rs 110 crore in bonds from Western UP Power Transmission Company Ltd., a Ghaziabad-based firm.

It also received bonds from Vedanta – Rs 104 crore.

MKJ Enterprises, described as a “pioneer in the stainless steel business in India”, donated Rs 69 crore. Yashoda Super Speciality Hospital donated Rs 64 crore. Future Gaming donated Rs 50 crore.

The companies on the list of major donors to political parties in India are involved in various business, ranging from construction and manufacturing to mining and real estate. These are sectors where the role of a government is key, whether to make rules or big-ticket decisions, like tax cuts.

New Delhi:

The Supreme Court today came down hard on the State Bank of India for not sharing the complete data on electoral bonds, a scheme that allowed individuals and businesses to donate anonymously to political parties. The court had struck down the scheme and directed the bank to share all details on the donations made in the last 5 years.

Hearing a petition by the Election Commission, the Supreme Court said that the data provided by the Supreme Court was incomplete. The five-judge bench, headed by Chief Justice DY Chandrachud, directed SBI to disclose electoral bond numbers as well, in addition to the details it has already shared.

“Who is appearing for the State Bank of India? They have not disclosed the bond numbers. It has to be disclosed by the State Bank of India,” Chief Justice Chandrachud said right at the outset of the hearing.

In its notice to SBI, the Supreme Court bench has asked the bank to explain the lapse during the next hearing on March 18.

The electoral bond numbers would help establish the link between donors and political parties.

Electoral bonds allowed individuals and businesses to donate money to political parties without declaring it. They were introduced by the BJP government in 2018 as an alternative to cash donations and had been pitched as an initiative to bring transparency in political funding.

The Supreme Court struck down the scheme last month, terming it unconstitutional and over concerns that this could lead to a quid pro quo. The court also urged SBI to share all details about the purchase and redemption of the bonds with the Election Commission.

In its petition, the poll panel said the March 11 order had noted that the copies of the documents submitted by it to the court in a sealed cover during the course of the hearing be maintained at the office of the EC.

The EC said it did not keep any copy of the documents and added that those may be returned so that it can comply with the court’s directions.

New Delhi:

The Supreme Court on Monday came down strongly on the State Bank of India for “wilful disobedience” of last month’s order – that data about donors and recipients of electoral bonds be released by March 6.

In a significant development, the court warned SBI of contempt proceedings if it failed to release this data by close of business tomorrow. The court also directed the Chairman and Managing Director of SBI – India’s largest bank, with a 23 per cent market share – to file an affidavit after compliance.

“While we are not inclined to exercise contempt jurisdiction at this time, we place SBI on notice that this court may be inclined to proceed against it for wilful disobedience if it does not comply with directions by timelines indicated in this order,” the court said.

A bench led by Chief Justice DY Chandrachud also directed the Election Commission of India to collect and publish all electoral bonds data on its website by 5 pm Friday.

READ | “Disclose Electoral Bonds’ Details By Tomorrow”: Top Court Rejects SBI Plea

The Supreme Court was hearing a plea by the SBI to extend a March 6 deadline to release all information about electoral bonds – donors and recipients. 

The bank argued it would take considerable time to collect, cross-check and release the data, which was stored in two “silos” to maintain confidentiality of both sides. “We need a little more time to comply. We were told this is supposed to be a secret.”

The bank had asked for time till June 30, which would be well after the general election.

READ | Matching Donor Details Takes Time, SBI Tells Supreme Court

In response the court pointed out donor details were available at the SBI’s Mumbai branch, and the bank just had to “open covers, collate details and give information”. The Chief Justice then asked the bank what work had been completed since its original order – 26 days ago. “Please tell what matching you have done in the last 26 days. There is a degree of candour expected from SBI…” he remarked.

READ | SBI Plea For Time To Submit Poll Bonds Info Dismissed: What Top Court Said

The court today also heard a pleas by the Association for Democratic Reform, or ADR, which was among the original challengers to the electoral bonds scheme launched by the government in 2017. It was to allow individuals and groups, including corporates, to make political donations with absolute anonymity.

The ADR had sought contempt action against the State Bank of India for “wilfully and deliberately” disobeyed the court’s order in this matter. The ADR claimed the extension was to obscure details of donors and donations before the April/May Lok Sabah election.

“It is submitted that the said application is mala fide and demonstrates a wilful and deliberate disobedience and defiance of judgement passed by Constitution bench of this court. It is further a clear attempt to undermine the authority of this court,” it said.

The bank’s request for extension was also criticised by Rajya Sabha MP Kapil Sibal, who called it “puerile”.  He called on the court  to protect its dignity, particularly after a Constitution bench judgement.

READ | “Puerile Reason”: Kapil Sibal After SBI Seeks Extension Over Electoral Bonds

Last month, in a landmark verdict, the Supreme Court held the electoral bond scheme to be “unconstitutional” and said it violated citizens’ right to information. The SBI was directed to reveal all bonds data by March 6 and the poll panel to make this information available to the public by March 13.

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The Reserve Bank of India (RBI) imposed a monetary penalty on State Bank of India and Canara Bank for regulatory violations, the central bank said in a press statement on Monday. 

The State Bank of India was fined Rs 2 crore for violations related to depositor education awareness funds and shareholding in a company exceeding 30% of the paid-up share capital of that company.

“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” said the central bank.

The Canara Bank was fined Rs 32.30 lakh for failing to rectify the rejected data and upload the same with the credit information companies within seven days of receiving such a rejection report from the CICs.

The RBI also fined City Union Bank Rs 66 lakh for violations related to the divergence of non-performing assets. 

“There was significant divergence between the non-performing assets, as reported by them and as assessed during the inspection. It did not put in place a system of periodic review of risk categorisation of accounts of its customers,” the RBI said.