The immediate market reaction to the Supreme Court’s decision was negative, as reflected in the drop in SBI’s share price. Supreme Court on Monday dismissed the State Bank of India’s (SBI) plea for an extension to disclose details related to the Electoral Bonds Scheme.
The Supreme Court on Monday (February 11) dismissed the State Bank of India’s (SBI) plea for an extension to disclose details related to the Electoral Bonds Scheme. This decision has had immediate repercussions on the market, notably affecting SBI’s share prices.
Impact on SBI Shares
Following the Supreme Court’s verdict, SBI shares witnessed a notable decline, dropping nearly 2% intraday. The share price, which opened at Rs 791, plummeted to Rs 772.60, marking a significant downturn in investor sentiment. This decline was mirrored by a broader market downturn, with the Sensex and Bank Nifty index also experiencing downturns.
The Supreme Court, led by Chief Justice of India DY Chandrachud, mandated that SBI must disclose the required details by March 12, rejecting the bank’s request for an extension until June 30. The Election Commission has been directed to subsequently publish this information by March 15. The court’s order specifically demands two sets of details:
“the name of the purchaser of electoral bonds and the denomination of the bonds along with the bonds redeemed by the respective political parties.”
This ruling follows a landmark verdict on February 15, where the court deemed the Centre’s electoral bonds scheme, which allowed for anonymous political funding, “unconstitutional.” The court had initially directed SBI to submit details of electoral bonds purchased from April 12, 2019, to the Election Commission, which was to publish this information by March 13.
Key Highlights from the Supreme Court’s Verdict
- Immediate Disclosure Required: The Supreme Court has set strict deadlines for SBI, requiring the bank to provide detailed information by March 12 and the Election Commission to publish these details by March 15.
2. Contempt Warning: The court has issued a stern warning to SBI, indicating that contempt proceedings could be initiated if the bank fails to comply with the order within the specified timeline.
3. Rejection of SBI’s Data Challenge: The Supreme Court dismissed SBI’s argument regarding the voluminous nature of the data, involving over 22,217 bonds and potentially 44,000 data sets, stating that the information sought is readily available.
4. Anonymity Preserved: While the court has mandated the disclosure of bond details, it has allowed for the anonymity of donors, not requiring a direct link between donors and political parties to be established in the disclosed information.
The immediate market reaction to the Supreme Court’s decision was negative, as reflected in the drop in SBI’s share price. This ruling not only impacts SBI’s market standing but also raises questions about the future of political funding in India. The decision to scrap the electoral bonds scheme and demand transparency in political donations marks a significant shift in the country’s approach to electoral financing.
As the details of the electoral bonds are set to be disclosed, the financial and political landscapes are bracing for the potential ramifications. This transparency could lead to a reevaluation of political funding mechanisms and foster a more transparent electoral process in India.
In conclusion, the Supreme Court’s stringent stance on the disclosure of electoral bond details represents a pivotal moment in Indian jurisprudence and politics. As SBI and the Election Commission work to comply with the court’s directives, the nation awaits the broader implications of this transparency on political funding and electoral integrity.
