(Bloomberg) — India’s Supreme Court struck down the validity of a controversial political funding tool on Thursday, a move hailed for boosting transparency, but may do little to damage the ruling Bharatiya Janata Party so close to elections.

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The court directed State Bank of India to stop issuing so-called electoral bonds in a unanimous decision announced by Chief Justice D. Y. Chandrachud.

Electoral bonds allow for anonymous donations to be made to political parties, and the BJP has been the main beneficiary of the funding. An independent election watchdog, the Association for Democratic Reforms, which first brought the case to the court, argued that citizens had the right to know the source of political funding. The government said donors had a right to privacy.

Yogendra Yadav, a political activist and founding member of political party Swaraj Abhiyan, said the court’s action was welcomed, but wouldn’t damage the BJP so close to the election.

The decision was “unduly and extraordinarily delayed,” he said. “It is too late now as the ruling party may already have taken advantage of the bonds. Opposition parties were anyway not getting much donation through these bonds.”

The bonds aren’t promissory notes traded in global markets. Instead, they can be bought by any individual or company from the government-owned State Bank of India in denominations from 1,000 rupees to 10 million rupees ($120,470). The donor’s name isn’t attached to the paper, which is then delivered to a political party to exchange for cash.

Niranjan Sahoo, a senior fellow with Delhi-based Observer Research Foundation, said that while the ruling was a setback for the BJP, it won’t have an impact on the elections.

“It is a moneyed party and it has deep pockets and collects its funding from multiple sources,” he said.

India’s 2019 election, which brought Prime Minister Narendra Modi to power for a second term, was among the world’s most expensive, costing about $7 billion, according to New Delhi’s Centre for Media Studies. A large chunk of the funding came from electoral bonds.

In the six years through 2022, the BJP earned nearly 52.7 billion rupees through this funding tool, accounting for about 57% of the 92 billion rupees raised through these bonds, according to a report by the Association for Democratic Reforms, based on data from India’s Election Commission. The share of the main opposition party, Indian National Congress, was 10%.

Trilochan Sastry, chairman of the association, said the ruling was a “great shot in the arm for Indian democracy.”

“I hope we have more transparent and cleaner elections than in the past but it is too early to say because there are only 2-3 months left,” he said.

–With assistance from Shruti Srivastava.

(Updates with additional details and comments)

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